US government pledges to keep 'boot on the neck' of BP over spill


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Louisiana // The US administration will "keep the boot on the neck of British Petroleum" over the huge Gulf of Mexico oil spill, said Ken Salazar, the interior secretary. His comments left the UK-based company under no illusions about the growing political and economic stakes as it tries to contain a potentially catastrophic oil leak.

Mr Salazar's comments came before he and Janet Napolitano, the secretary of homeland security, were to meet BP executives in Washington yesterday to press for compensation and reimbursement for individual and government costs related to the 200,000-gallon-a-day leak. The leak began with the sinking of the Deepwater Horizon rig. BP said its response effort was "the largest ever mobilised anywhere in the world".

Government and local discontent with the company has grown since the rig exploded on April 20 and sank two days later, leaving 11 people missing and presumed dead. Officials and residents in four southern US states - Louisiana, Mississippi, Alabama and Florida - were on high alert, fearing the enormous slick would reach their shores. Containment operations were hampered in recent days by strong winds. BP, meanwhile, was trying several methods to cut the flow of oil from the well. It was preparing to install a shut-off valve on one of the three leaks that are some 1,500 metres below the surface.

In southern Louisiana, it was also building a concrete dome to sink on to the leaking well in an operation previously untested in such deep waters. BP is liable for all costs, running at US$6 million (Dh22m) a day, and the total bill could run to $14 billion including compensation, analysts say. "BP is responsible for this leak - BP will be paying the bill," said the US President Barack Obama, who met officials and local fishermen during a visit to the coastal town of Venice, Louisiana, on Sunday.

Mr Obama made it clear that US authorities would not be liable for the clean-up costs but would do all they could to lessen the potential catastrophe in the region. Congress has called for an investigation into the spill. BP said that equipment failure was behind the oil rig fire but that it did not yet know exactly what happened. @Email:sdevi@thenational.ae

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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