President Sheikh Mohamed receives Antonio Costa, president of the European Council, at Al Shati Palace on October 29, 2025. Abdulla Al Neyadi / UAE Presidential Court
President Sheikh Mohamed receives Antonio Costa, president of the European Council, at Al Shati Palace on October 29, 2025. Abdulla Al Neyadi / UAE Presidential Court
President Sheikh Mohamed receives Antonio Costa, president of the European Council, at Al Shati Palace on October 29, 2025. Abdulla Al Neyadi / UAE Presidential Court
President Sheikh Mohamed receives Antonio Costa, president of the European Council, at Al Shati Palace on October 29, 2025. Abdulla Al Neyadi / UAE Presidential Court

EU hails UAE as 'reliable partner' in driving trade and global security


Aveen Karim
  • English
  • Arabic

The ties between the European Union and the United Arab Emirates are "not only strong, they are strategic," the president of the European Council stated in remarks to The National, praising Abu Dhabi for its pivotal role in fostering trade with the bloc and contributing to global security.

"The UAE is an important and reliable partner for the EU in trade, in security and in global stability," Antonio Costa said after his first official visit to the country and meeting with President Sheikh Mohamed this week.

The meeting at Qasr Al Shati on Tuesday touched upon the landmark trade agreement that was launched between the UAE and the EU in April, with both leaders stressing the importance of the continuing negotiations over its implementation.

The Free Trade Agreement (FTA) would facilitate business between the UAE and the world's largest economic bloc. "The fact that we are negotiating a FTA and discussing a Strategic Partnership Agreement is a clear demonstration of our commitment to deepen our co-operation," Mr Costa said.

In recent years, the UAE has struck a series of comprehensive economic partnership agreements with countries, aimed at boosting trade. A deal with the EU would be the largest since the UAE signed a Cepa with India in February 2022. It can take between three to five years to implement such an agreement but the UAE has expressed hope to conclude negotiations within a year.

Three rounds of negotiations have already taken place and a next round is scheduled for next month, Mr Costa added.

The agreements would facilitate and deepen existing trade between the bloc and the UAE, as well as create new commercial opportunities. The EU is the UAE’s second-largest global trade partner, sharing $67.6 billion in non-oil trade in 2024.

The areas that are expected to benefit the most once the agreements are implemented are artificial intelligence, security co-operation, research and education, and renewable energy.

"Trade negotiations with the UAE are advancing well, reflecting our strong bilateral relationship," he stated.

Mr Costa said the agreements would allow both sides to "leverage their respective strengths: the UAE as a dynamic hub in the Gulf and the EU as a single powerful single market and technology leader".

Beyond the benefits of expanding trade, Mr Costa said it was crucial to "weave a global network of co-operation across regions" particularly in such a "multipolar world that faces increasing fragmentation and uncertainty".

The UAE started bilateral engagement with Brussels after EU-Gulf Co-operation Council talks, which started in 1990, were formally suspended in 2008. The European Council head said the bloc was still seeking to expand its partnership with the GCC as a "reliable partner in today's shifting geopolitical environment".

As the EU seeks to strengthen its partnerships across the Gulf, regional conflicts continue to dominate the bulk of discussions, particularly in Gaza, where the war has heightened tensions and underscored the urgent need for co-ordinated international diplomacy.

Multipolar world

The war in Gaza has sparked bursts of conflict across the region between Israel and Iran – as well as its proxies. The targeting of commercial vessels in the Red Sea by Yemen's Houthi rebels sent global shock waves.

The EU launched Operation Aspides – named after the Greek word for “shield” – in February last year in response to the attacks. "The fact that Houthis continue to conduct attacks is a symptom of broader regional instability and weak governance," Mr Costa said, stating that it should be part of a "broader strategy" that includes sanctions, regional diplomacy and efforts on the ground.

Mr Costa and European Commission President Ursula von der Leyen hosted Egypt’s President Abdel Fattah El Sisi in Brussels for the first EU-Egypt summit about two weeks ago. He recognised the instrumental role Cairo has played in conflict mediation, most recently seen in Gaza and now Lebanon.

The EU and Egypt signed a strategic and comprehensive partnership in March 2024, designed to boost Egypt's economy and prevent illegal migration to Europe. "We have an economic and trade relation that has been growing impressively and that we want to see grow even further," he said.

A US-brokered ceasefire came into effect in Gaza last month, ending two years of Israel's devastating war. The deal, although still shaky, was reached after months of mediation by the US, Qatar, Egypt and Turkey. "I also want to commend the UAE's crucial role in the provision of humanitarian assistance to Gaza," Mr Costa said.

Throughout the war, the UAE has been at the forefront of aid deliveries to the hunger-stricken enclave, sending supplies through land, air and water. It has also evacuated patients for medical treatment in the country.

"The humanitarian situation in Gaza remains catastrophic and humanitarian aid needs to be delivered unimpeded," Mr Costa stated. Aid has been trickling in since the truce, but Israel maintains restrictions, and not all border crossings have been reopened.

"The EU is supporting continuing efforts towards peace and is ready to support reconstruction, recovery and governance in Gaza," he said.

The EU is the top financial supporter of the Palestinian Authority and has historically been the largest humanitarian aid donor to Gaza.

The EU's unanimous decision-making process has often hampered foreign policy decisions, such as criticism of Israel, and while the US and Middle Eastern powers have been leading the way with the peace process in Gaza, Mr Costa believes the EU should play a role.

Future governing of Gaza should be operated by a group of technocratic Palestinians, according to US President Donald Trump's 20-point plan. It would work under the supervision of an international body named the “board of peace".

While Hamas has released all living hostages, the deal requires the return of all deceased ones, too, but the group has said it is facing difficulties in retrieving them from areas that suffered heavy Israeli bombardment. The second phase – which deals with Hamas's disarmament and future governance – is set to be the most difficult stage.

"The EU is supporting the US efforts for peace in the Middle East and we have a lot of expertise to bring to the table," Mr Costa said, adding that the bloc "should be part of the Board of Peace".

While Mr Trump has backed Israel’s military campaign while also pushing to emerge as a peace broker, Brussels has sought to balance that stance with calls for restrained and a renewed push for a two-state solution.

"The EU is fully committed to a lasting and sustainable peace, based on the two-state solution," Mr Costa said while welcoming Mr Trump's peace plan.

A similar dynamic has played out in Ukraine, where Europe’s heavy dependence on US military and strategic leadership has highlighted its vulnerability. Mr Trump has boasted about his efforts to end the war in Ukraine, which shows no signs of stopping three years on.

The US president met with Russian President Vladimir Putin in Alaska in August and a second meeting that was expected to take place in Hungary was cancelled this week. "What we are seeing is that despite President Trump's efforts, President Putin is not willing to engage in peace negotiations," Mr Costa said, pledging continuous political and financial support for Ukraine.

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

Timeline

2012-2015

The company offers payments/bribes to win key contracts in the Middle East

May 2017

The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts

September 2021

Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act

October 2021

Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence 

December 2024

Petrofac enters into comprehensive restructuring to strengthen the financial position of the group

May 2025

The High Court of England and Wales approves the company’s restructuring plan

July 2025

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August 2025

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October 2025

Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange

November 2025

180 Petrofac employees laid off in the UAE

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When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.

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The National Archives, Abu Dhabi

Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.

Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en

Updated: November 02, 2025, 4:48 PM