Live updates: Follow the latest news on Cop28
There are hopes on Thursday for an early deal on loss and damage at Cop28, sources said.
It is thought the Cop28 presidency will seek to reach an agreement during Thursday’s opening plenary session of the summit.
The plenary was pushed back from 10am on Thursday to the afternoon as talks continue to formalise the agenda, but nothing is guaranteed during the UN Framework Convention on Climate Change (UNFCCC) process.
If a deal on loss and damage happens it would represent an early win for the Cop28 presidency.
Loss and damage refers broadly to financial assistance to the most vulnerable countries suffering from the worst affects of climate change.
Countries agreed to establish a fund at Cop27 in Sharm El Sheikh and talks continued throughout the year.
A framework deal was finally agreed in Abu Dhabi this month and this will go to the parties at Cop28.
A 'crucial step' forward
The framework deal stipulated that the World Bank would host the fund but it was also agreed there was no strict obligation on countries to contribute funds.
The key element is money – billions of dollars are said to be needed – so expect considerable wrangling about this during the summit even if a deal is reached.
Harjeet Singh, head of global political strategy at Climate Action Network International, said central to the Cop28 agenda must be the “operationalisation of the loss and damage fund".
Mr Singh said it would be a “crucial step” in “acknowledging and addressing” the disproportionate effect of climate change on vulnerable communities and countries.
Reacting to a draft decision text that was expected to be put to parties on the opening day, Mr Singh wrote on X, formerly Twitter, that it "mirrors the transitional committee's final recommendations" but fell short of "fully addressing developing nations' concerns, including the proposal to designate the World Bank as an interim host".
"While the decision’s adoption at Cop28 is likely, it is crucial to simultaneously enhance its financial scope – necessitating hundreds of billions of dollars annually – and establish a process for initial capitalisation and periodic replenishment. This step is essential to efficiently channel funds to those battling climate catastrophes," he said.
Aside from the focus on getting the loss and damage fund into operation, topics likely to come up for discussion include: scaling up climate finance; the future of fossil fuels; bolstering food systems to cope with a warming world; ending deforestation; and examining the effects of the climate crisis on our health.
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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
