Iraq’s Federal Supreme Court dismissed on Tuesday a lawsuit by President Abdul Latif Rashid against Prime Minister Mohammed Shia Al Sudani and Finance Minister Taif Sami Mohammed, over delays in paying civil servants in the country's semi-autonomous Kurdish region.
Mr Rashid had asked the court to issue an order to ensure the region’s employees are “paid continuously and on time”, arguing that “technical issues should not delay” the salaries of public workers.
Since the 2003 US-led invasion that toppled Saddam Hussein and helped the Kurds gain official semi-autonomy, the Kurdistan Regional Government has been at loggerheads with the federal government over issues including energy deals the regional government signed unilaterally and its share of the federal budget.
The semi-autonomous Kurdish region's oil sector suffered a major blow in early 2022 when the Federal Supreme Court ruled that the region's law regulating the industry was unconstitutional. The court demanded it hand over all of the oil sector’s activities to Baghdad – including exports.
A 2023 arbitration ruling forced the region's exports through Turkey to halt, cutting off a major source of revenue for Erbil and leaving it struggling to fulfil salary payments.
Baghdad and Erbil have agreed on a temporary mechanism of sending loans to pay civil servants and social services as a way to tackle the budget allocation issue. This stipulates that the region is entitled to its share only when it hands over 400,000 barrels of oil a day to Baghdad.
In an effort to unblock northern oil exports, Parliament approved this month a budget amendment to subsidise production costs for international oil companies operating in the region. The amendment sets the rate at $16 a barrel, up from an earlier proposal for $7.90 a barrel for transport and production costs, which was rejected as too low by the Kurdistan Regional Government.
Iraq’s Oil Ministry, in co-ordination with the region’s Ministry of Natural Resources, will appoint an international consultant within 60 days to assess fair production and transport costs, under the new deal.
Oil exports are set to resume next week at the capacity of 300,000 barrels a day, Iraq’s Oil Minister Hayan Abdel Ghani announced on Monday. It will be handed to Baghdad for export through Turkey’s port of Ceyhan, Mr Ghani said.
On Tuesday, semi-autonomous Kurdish region Prime Minister Masrour Barzani met with the Turkish Foreign Deputy Minister Berris Ekinci. They “agreed on the need” to resume oil exports through Ceyhan.
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
Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
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Political flags or banners
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Bikes, skateboards or scooters
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