Opposition mayors in Istanbul and Ankara claimed victory in Turkey's local elections on Sunday, delivering a surprise election defeat to President Recep Tayyip Erdogan.
He later accepted their gains, calling the vote a “turning point”, as his ruling Justice and Development Party (AKP) lost in key battlegrounds Ankara and Istanbul.
With 96 per cent of ballot boxes opened, Istanbul's Republican People's Party (CHP) mayor Ekrem Imamoglu said he had seen off the challenge of Mr Erdogan's candidate by more than one million votes.
“We have won the election,” Mr Imamoglu declared. “Tomorrow is a new spring day for our country.”
Large crowds filled the square outside the Istanbul city headquarters waving Turkish flags and lighting torches to celebrate the result.
The CHP also retained the capital with Mayor Mansur Yavas saying “the elections are over, we will continue to serve Ankara”.
Mr Yavas was leading with 58.6 per cent of the vote against 33.5 per cent for his AKP opponent from 46.4 per cent of ballot boxes opened. The CHP was also ahead in Izmir, Turkey's third city and a party stronghold.
Both Mr Imamoglu and Mr Yavas are members of the pro-secular nationalist Republican People's Party or CHP. Mr Erdogan's AKP lost control of both cities in a surprise victory for the country’s embattled opposition in 2019, which ushered in fresh crackdowns on his opponents, and was followed by Mr Erdogan's re-election as president in 2023.
Sixty-one million people were eligible to vote in the local elections across the country.
The vote was taking place after years of economic gloom, with the country having suffered 70 per cent inflation and a fall in industrial output. But in recent months, the economy has returned to modest growth and youth unemployment dipped around a percentage point to nine per cent last year, significantly below a lot of European countries, but still near double digits.
There were reports of violence in separate incidents across the country, despite the Interior Minister Ali Yerlikaya earlier announcing that 594,000 security personnel had been posted to ensure the vote goes smoothly.
The state-owned Anadolu reported that armed groups clashed in south-eastern Turkey, with at least one person killed and 11 more injured. It added that another 16 were injured in a clash in Sanliurfa, also in Turkey's restive south-east, where Kurdish separatist groups have a strong presence.
The election was seen as crucial for Mr Erdogan's plans to usher in a new national constitution that would allow him to rule beyond 2028, analysts say.
Observers say many governing party supporters could have chosen not to go to the polls in protest of the economic downturn that has left many struggling to pay for food, utilities and rent.
Mr Imamoglu ran in the poll without the support of some of the parties that helped him to victory in 2019.
Both the pro-Kurdish Peoples’ Equality and Democracy Party and the nationalist IYI Party fielded their own candidates in the race, which risked siphoning away votes from Mr Imamoglu.
A six-party opposition alliance led by CHP disintegrated after it failed to oust Mr Erdogan in last year's election, unable to capitalise on the economic crisis and the government's initially poor response to last year's devastating earthquake that killed more than 53,000 people.
Meanwhile, a new religious-conservative party, the New Welfare Party, or YRP, was appealing to voters who have been disillusioned with Mr Erdogan’s handling of the economy and was expected to draw some votes away from his candidates.
In Turkey's mainly Kurdish-populated south-east, the DEM Party was expected to win many of the municipalities but it's unclear whether it would be allowed to retain them. In previous years, Mr Erdogan’s government removed elected pro-Kurdish mayors from office for alleged links to Kurdish militants and replaced them with state-appointed trustees.
Agencies contributed to this report
Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
Rating: 3/5
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FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
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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
Global institutions: BlackRock and KKR
US-based BlackRock is the world's largest asset manager, with $5.98 trillion of assets under management as of the end of last year. The New York firm run by Larry Fink provides investment management services to institutional clients and retail investors including governments, sovereign wealth funds, corporations, banks and charitable foundations around the world, through a variety of investment vehicles.
KKR & Co, or Kohlberg Kravis Roberts, is a global private equity and investment firm with around $195 billion of assets as of the end of last year. The New York-based firm, founded by Henry Kravis and George Roberts, invests in multiple alternative asset classes through direct or fund-to-fund investments with a particular focus on infrastructure, technology, healthcare, real estate and energy.