Displaced Palestinians leave a makeshift camp in Rafah, near the border with Egypt, in the southern Gaza Strip. AFP
Displaced Palestinians leave a makeshift camp in Rafah, near the border with Egypt, in the southern Gaza Strip. AFP
Displaced Palestinians leave a makeshift camp in Rafah, near the border with Egypt, in the southern Gaza Strip. AFP
Displaced Palestinians leave a makeshift camp in Rafah, near the border with Egypt, in the southern Gaza Strip. AFP

EU vows to push for two-state solution in Middle East conflict


Sunniva Rose
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The EU has renewed pressure on Israel to accept a two-state solution despite Israeli Prime Minister Benjamin Netanyahu saying there is “no space” for a Palestinian state.

Speaking before a meeting of EU foreign ministers in Brussels on Monday, the EU's top diplomat Josep Borrell told Israel “peace and stability cannot be built only by military means”.

“Which are the other solutions they have in mind?” he added. “To make all the Palestinians leave? To kill off them? From now on, I will not talk about the peace process but about the two-state solution process. We are serious about that.”

Foreign ministers from Palestine, Israel, Egypt, Saudi Arabia and Jordan will attend the meeting to discuss how to de-escalate fighting in Gaza and how the enclave should be governed after the war.

In an apparent rift between Israel and the West, Mr Netanyahu has publicly stated his rejection of a Palestinian state. A two-state solution is the only option on the table, US and EU officials say.

Mr Netanyahu's comments are worrying, said French Foreign Minister Stephane Sejourne. “There will have to be a Palestinian state with security guarantees for all.”

Mr Borrell added: “This solution has been approved by the UN and the whole international community is behind it.”

Israel “cannot just be left unaccountable” for rejecting a two-state solution, said Jordan's Foreign Minister Ayman Safadi.

He called on the UN Security Council to adopt a binding resolution establishing a Palestinian state based on 1967 lines with East Jerusalem as its capital.

The Arab world demonstrated in 2002 with the Arab Peace Initiative that it was ready to establish ties with Israel in return for a Palestinian state, added Mr Safadi.

“The whole world has to decide: do we allow a radical racist agenda to dictate the future or do we all come together and say the path is clear, we want peace for everyone in the region?” he asked.

The EU's external action service, led by Mr Borrell, has reportedly prepared a 10-point plan for Gaza which it will present to the foreign ministers.

This includes “an independent Palestinian state, ironclad guarantees for Israel and full normalisation of Israel with Arab countries”, a high-ranking EU official said.

The US and EU want Hamas, which has controlled Gaza since 2007, to have no role in a future government. The militant group is designated a terrorist organisation by Washington and Brussels.

Israel's attempt to destroy Hamas in Gaza has failed and is likely to become an obstacle to peace in the region, said Mr Borrell.

“The way to destroy Hamas is not the way they are doing it,” Mr Borrell said. “They are seeding the hate for generations.”

The Israeli operation has killed more than 25,000 people in retaliation to Hamas attacks on Israel in which about 1,200 people were killed.

No concrete outcome is expected from Monday's meetings. European diplomats have said it is already an achievement that so many foreign chiefs from the Middle East have come in person to Brussels.

It is the first time in eight years that a high-ranking Israeli government member has attended a meeting of EU foreign ministers in person.

In what one senior EU official has described as a “complex ballet”, Israeli Foreign Minister Israel Katz was meeting his European counterparts in the morning before they hold talks with the Palestine Authority's Foreign Minister Riyad Al Maliki.

On arrival in Brussels, Mr Katz showed journalists pictures of Israeli hostages in Gaza and said: "Our brave soldiers are fighting in very hard conditions for those two aims: to bring back our hostages and restore security for citizens of Israel." He took no questions.

In another sign of apparent tensions between the West and Israel, Mr Borrell on Sunday accused Israel of financing Hamas in an attempt to weaken the PA.

Such claims view which has previously been voiced by historians but rarely echoed by politicians. The Israeli government has denied such accusations in the past.

Josep Borrell, the EU's foreign policy chief, says he will focus on a two-state solution in the Middle East. AFP
Josep Borrell, the EU's foreign policy chief, says he will focus on a two-state solution in the Middle East. AFP

Attacks by the Iran-backed Houthi rebels against commercial ships in the Red Sea, which the Yemeni militia has linked to the war in Gaza, are also expected to be on the agenda.

Sources say EU diplomats have agreed to expand on an existing French-led naval mission in the region, though no ultimate decision is expected on Monday.

On Sunday, the Palestinian Foreign Ministry called on the EU and the US to recognise Palestinian statehood “to protect the two-state solution … considering that European and American recognition of the Palestinian state is what establishes the launch of the peace process”.

It also described previous remarks by Mr Netanyahu as racist and condemned the “repetition of colonial ambitions that are hostile to peace”.

“It is time for the international community to impose sanctions on Netanyahu and his coalition, and hold him fully and directly responsible for the spiral of wars, violence and humanitarian catastrophe that has befallen our people,” the Palestinian Foreign Ministry said.

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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The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

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Emergency

Director: Kangana Ranaut

Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry 

Rating: 2/5

Updated: January 22, 2024, 10:25 AM