Palestinian stone throwers clash with Israeli border police in A-Ram town, north of Jerusalem, on January 27, as Palestinians all over the West Bank protested to condemn the killing of nine Palestinians in Jenin refugee camp during an Israeli raid on January 26. EPA
Palestinian stone throwers clash with Israeli border police in A-Ram town, north of Jerusalem, on January 27, as Palestinians all over the West Bank protested to condemn the killing of nine Palestinians in Jenin refugee camp during an Israeli raid on January 26. EPA
Palestinian stone throwers clash with Israeli border police in A-Ram town, north of Jerusalem, on January 27, as Palestinians all over the West Bank protested to condemn the killing of nine Palestinians in Jenin refugee camp during an Israeli raid on January 26. EPA
Palestinian stone throwers clash with Israeli border police in A-Ram town, north of Jerusalem, on January 27, as Palestinians all over the West Bank protested to condemn the killing of nine Palestinia


The US is right to show concern for the situation in Palestine-Israel but who's listening?


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February 01, 2023

In the occupied Palestinian territories – especially East Jerusalem and the West Bank – 2023 is shaping up to be a volatile year. As a consequence, the normally sacrosanct US-Israeli relationship is headed into unusually choppy waters. The current flare-up of deadly violence will be hard to contain and the real question is, how bad will things get?

Last year was the most violent one in the West Bank since 2005, when the UN began keeping records of Palestinians killed there by Israeli occupation forces. Among the victims was the noted American journalist Shireen Abu Akleh, who had been infuriating Israeli authorities for decades with her coverage of the occupation.

Despite a simmering insurgency among largely unaffiliated armed Palestinian youth gangs such as the “Lion's Den”, which emerged in response to routine Israeli attacks, especially night raids into supposedly autonomous Palestinian towns, relations between the US and Israel remained largely unaffected. Both US President Joe Biden and the Israeli coalition government led by former prime minister Naftali Bennett had every interest in supporting each other by not making waves in the bilateral relationship.

Lurking in the background was the mutually feared and loathed right-wing Israeli leader Benjamin Netanyahu. In December, Mr Netanyahu pieced together the most extreme right-wing government in Israel's history, bringing to power religious and nationalist extremists who have heretofore been considered anathema even by the Israeli far right.

Some of these figures, such as the new minister of national security, Itamar Ben-Gvir, appeared delighted by the sudden opportunity to throw petrol on the smouldering embers. Within days of his appointment, he made an official visit to the highly volatile Haram Al Sharif compound, which seemed modelled on Ariel Sharon’s similar intrusion in 2000 that sparked the second intifada.

That came just a few weeks after the Oslo peace process hit a dead end at the ill-fated and ill-conceived Camp David summit in July 2000. And since the equally ill-advised and quixotic quest for a meaningful Israeli settlement freeze during Barack Obama's first term as US president, even the simulation of negotiations has been dropped.

Former Israeli Prime Minister Ehud Barak (R) jokingly pushes former Palestinian President Yasser Arafat (C) into the Laurel cabin on the grounds of Camp David as former US President Bill Clinton watches during peace talks, on July 11, 2000. Arafat and Barak were insisting that the other proceed through the door first. Camp David is the venue where Egypt and Israel made peace in September 1978, and the Laurel cabin was the site of many of the meetings. Reuters
Former Israeli Prime Minister Ehud Barak (R) jokingly pushes former Palestinian President Yasser Arafat (C) into the Laurel cabin on the grounds of Camp David as former US President Bill Clinton watches during peace talks, on July 11, 2000. Arafat and Barak were insisting that the other proceed through the door first. Camp David is the venue where Egypt and Israel made peace in September 1978, and the Laurel cabin was the site of many of the meetings. Reuters

Instead, for the past 23 years, the Israeli political scene has been moving relentlessly away from any pretence of a commitment to a two-state solution and instead towards annexation, possibly combined with some level of expulsion of Palestinians from parts of the West Bank to be officially merged with Israel.

Mr Netanyahu's new government says that it is preparing to transfer key governance powers in the occupied territories from the occupation Civil Administration to new ultra-right-wing Finance Minister, Bezalel Smotrich. The Israeli government's own senior legal advisers have warned that much of the rest of the world, including the International Court of Justice, would be likely to view such a step as de facto annexation – and rightly so.

Human beings, no matter their ethnicity, culture or religion, simply will not accept a long-term and open-ended future of total subordination to another people

While Israeli politics have been moving steadily towards annexation, Palestinian politics are just dead in the water. The Palestine Liberation Organisation (PLO) and Palestinian Authority gambled everything on negotiating a two-state solution with the Israelis, who have apparently lost any inclination to move in that direction. They have yet to identify an alternative. And Hamas, which rules Gaza, has no answer other than the catastrophic and corrupt extremist misrule on full and horrifying display in the Palestinian enclave.

Yet a new generation of Palestinians that lacks any memory of how damaging and self-defeating the second intifada was and has grown up without any framework of hope for citizenship – in whatever country – and basic human rights, let alone self-determination, finally appears to be taking the initiative. Believing they have nothing to lose and unmoored from attachment to established and discredited political movements, both secular and extremist from the PLO to Hamas and even Palestinian Islamic Jihad, these angry and desperate young men are playing their gruesome roles in a tragedy of grim inevitability.

Human beings, no matter their ethnicity, culture or religion, simply will not accept a long-term and open-ended future of total subordination to another people, especially in their own land and in relatively equal numbers. The violent relationship between Israelis and Palestinians is hard-wired and structural. A reversal of this essential relationship of dominance and subordination between the two identity groups would produce roughly the same behaviours on both sides.

The deepest tragedy is that the Israeli extreme right seems to be counting on Palestinian rage and desperation to provide them with the opportunity to go as far as they can in their twin goals of annexation and expulsion. Not only will Israel impose the usual collective punishments of home demolitions and mass lockdowns following the recent violent Palestinian attacks (though never in response to Jewish ones), but extremist cabinet ministers have also demanded official recognition for a set of unauthorised settlement outposts “in retaliation” for attacks against Israelis.

Never mind that there is no logical connection whatsoever between any rational response to violence and recognising wildcat settlements. It is just an excuse. Unfortunately, the enraged Palestinian youths involved are not likely to reflect on what else they could provide the rationalisation for as reciprocal violence intensifies.

US Secretary of State Anthony Blinken, who visited the region this week, knows that he and Mr Biden have little leverage over Mr Netanyahu, especially since they seem to be oddly disinclined to so much as fortnightly acknowledge that Palestinians are suffering under a military occupation. The Israeli Prime Minister, in turn, has little leverage over his more radical cabinet colleagues. Palestinian President Mahmoud Abbas has, if anything, even less leverage over the youths driving the Palestinian side of the cycle of violence that Israeli extremists are counting on.

The US is right to show concern, but neither side is really listening. The past 10 years suggest that, as things stand, Israel can be slowed, but not deterred, from creeping steadily towards annexation, and always intensifying the status quo of systematic, formalised inequality between Jews and Palestinians in the occupied territories.

Many Jewish and other Americans, especially Democrats, are increasingly unable to support or ignore this reality, especially since it is coupled with efforts by fundamentalists in Israel to exclude many Jewish Americans from the Israeli or even Jewish fold on denominational or ancestral grounds.

Republicans, driven by apocalyptic evangelical Christians, may not care, but as long as the US has a Democratic administration and Israel has a fundamentalist, racist and annexationist government, the traditionally inviolable “special relationship” will be imperilled.

Mr Netanyahu, Mr Biden and Mr Blinken will strive to paper over this growing schism, but it’s likely to grow considerably wider by the end of this dangerous year.

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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Updated: February 01, 2023, 3:23 PM