Carrying the body of a victim who died after being infected at a cemetery outside Tehran, Iran, March 30, 2020. AP
Carrying the body of a victim who died after being infected at a cemetery outside Tehran, Iran, March 30, 2020. AP
Carrying the body of a victim who died after being infected at a cemetery outside Tehran, Iran, March 30, 2020. AP
Carrying the body of a victim who died after being infected at a cemetery outside Tehran, Iran, March 30, 2020. AP

Europe is offering Iran aid, and a chance to restore its relationship with the world


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The delivery of the first batch of European aid to Iran this week does not only represent a lifeline to the regime in Tehran as it attempts to tackle the deadly impact of the coronavirus pandemic. It also presents Iran with the opportunity to begin the painful process of rebuilding relations with the outside world.

Long before the coronavirus outbreak, the ayatollahs appeared to have adopted a bunker mentality, as far as their engagement with the outside world was concerned. This was prompted, in part, by their resentment at the Trump administration’s unilateral withdrawal from the 2015 nuclear deal.

Although 16 countries, including the UAE, have claimed to trace their own outbreaks to Iran, Tehran has failed to grasp the significance of the situation

In addition, the determination of the hardline supporters of Supreme Leader Ayatollah Ali Khamenei to persist with expanding Iran’s malign influence throughout the Middle East in countries like Iraq and Syria meant there was little appetite for engaging in a constructive relationship with the West and its allies in the region.

Thus, when the first reports that the coronavirus had spread to Iran began to surface in early February, Iran’s international isolation meant that it was at a distinct disadvantage in dealing with the outbreak.

This may well have contributed to Tehran’s disastrous handling of the pandemic, which has affected Iran more than any other country in the Middle East. In the last few days, Iran's death toll has officially passed 3,000, with more than 47,000 confirmed cases. But these figures have been contested, with opposition groups claiming they should be much higher; some claim as many as 4,762 people had already died by the end of March.

What is not in dispute is that the regime’s initial refusal to acknowledge the scale of the problem has meant that it has been unable to implement the comprehensive measures adopted by many other countries. Consequently, the virus has spread to all of Iran’s 31 provinces.

Moreover, although many countries, including Lebanon and Bahrain, have claimed to trace their own outbreaks to Iran, Tehran has persistently failed to grasp the significance of the situation, playing it down rather than mounting an effective response. In February Ayatollah Khamenei accused the country's enemies of deliberately exaggerating the threat, a sentiment echoed by the country’s president, Hassan Rouhani, who warned against the “conspiracies and fear-mongering of our enemies”. Iran’s state TV has even claimed the coronavirus could be a US-manufactured "bioweapon".

All of this has severely diminishing Tehran's international standing, which was already low enough in the wake of it having mistakenly shot down of a Ukrainian passenger jet in early January, costing 176 passengers and crew members. But Iran’s rulers have only themselves to blame for the country’s dire predicament.

An illuminated tower in Tehran, March 31, 2020. Bloomberg
An illuminated tower in Tehran, March 31, 2020. Bloomberg

In this context, the successful delivery to Iran earlier this week of a shipment of medical supplies from Britain, France and Germany could prove to be a game-changer in terms of Tehran’s relations with the outside world – assuming, that is, that the regime is able to make the most of the opportunity. Iran's regional neighbours, including the UAE, have also delivered their own aid packages to Tehran.

The three European countries involved in the most recent transaction, the so-called E3, have been looking for ways to maintain trade ties with Iran, as they are all signatories to a 2015 nuclear deal that has since been scuttled by the US's decision to withdraw from it and impose wide-ranging sanctions on the Iranians instead.

Initially, the EU wanted to establish a trade mechanism, known as the Special Purpose Vehicle, that would allow European businesses to continue trading with Iran without damaging their commercial relationship with the US.

The EU, faced with strong opposition from Washington over its proposal, eventually had to scale down its ambitions to the extent that it has now set up a new arrangement, the Instrument in Support of Trade Exchanges, or Instex, that allows European nations to conduct limited trade with Iran that is confined to basic humanitarian supplies, such as medicines and food.

The Trump administration, stung by criticism that its hardline approach was having a negative impact on Tehran’s ability to tackle the pandemic, has given Instex its begrudging approval, with the result that the E3 have offered Iran a €5 million relief package. This week’s delivery of medicines, estimated to be worth $548,000, is the first transaction to be completed under the new Instex arrangements.

It is modest compared to the billions of dollars in trade that existed between Iran and Europe prior to Washington’s withdrawal from the nuclear deal, and further transactions are unlikely to increase much beyond that level because many European firms still fear legal repercussions in the US from doing business with Tehran.

Nevertheless, they do represent an opportunity for Tehran to begin repairing its relations with the West, a process that can only begin in earnest if tensions between the supporters of Ayatollah Khamenei and the more pragmatic supporters of Mr Rouhani can be set aside.

To date, the former have flatly rejected outside offers of help, with Major General Hossein Salami, the commander of the Islamic Revolutionary Guard Corps, denouncing an offer from the Trump administration to help combat the pandemic as “deception and lies.”

This kind of attitude is hardly going to help Iran in its desperate hour of need. The hardliners must understand that the threat posed by the coronavirus, combined with the economic hardship the country is suffering as a result of sanctions, poses an existential threat to the regime, which will only survive by engaging with the outside world, rather than constantly railing against it.

Con Coughlin is the Telegraph’s defence and foreign affairs editor

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If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

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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

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Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

When Umm Kulthum performed in Abu Dhabi

  

 

 

 

Known as The Lady of Arabic Song, Umm Kulthum performed in Abu Dhabi on November 28, 1971, as part of celebrations for the fifth anniversary of the accession of Sheikh Zayed bin Sultan Al Nahyan as Ruler of Abu Dhabi. A concert hall was constructed for the event on land that is now Al Nahyan Stadium, behind Al Wahda Mall. The audience were treated to many of Kulthum's most well-known songs as part of the sold-out show, including Aghadan Alqak and Enta Omri.