Musharraf axes plan to return to Pakistan


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DUBAI // Pervez Musharraf will not return to Pakistan as planned, his party said yesterday.

The announcement from the All Pakistan Muslim League (APML) came as the nation's government stood by its threat that the former president would be arrested upon arrival.

At a press conference in Dubai, the APML said the "political situation was not conducive" for Mr Musharraf to go back.

"The government, opposition and most of the stakeholders in the present political situation are engaged in a tussle, conflict with one another" said Mohammed Ali Saif, the APML secretary general.

Mr Musharraf, the party's founder, lives in Dubai but was not present yesterday. Earlier this month he told a rally in Karachi, via a video link, that he would return between January 27 and January 30 to take part in parliamentary elections in 2013.

"It is an institutional conflict. If he returns, it will provide an escape route to political parties and divert people's attention," Mr Saif said. He blamed the turbulence on the "memogate" scandal, concerning a memo that purportedly sought US help to prevent Pakistan's army from staging a possible coup.

"There is serious tension between the Supreme Court and the government," Mr Saif said, asserting that Mr Musharraf's delay had nothing to do with the arrest warnings.

The party said the former general would however return as soon as the turmoil ended.

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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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