The Russian Navy's rescue tug 'Epron' sails in the Bosphorus in Istanbul, Turkey, on its way to the Black Sea on February 17. Reuters
The Russian Navy's rescue tug 'Epron' sails in the Bosphorus in Istanbul, Turkey, on its way to the Black Sea on February 17. Reuters
The Russian Navy's rescue tug 'Epron' sails in the Bosphorus in Istanbul, Turkey, on its way to the Black Sea on February 17. Reuters
The Russian Navy's rescue tug 'Epron' sails in the Bosphorus in Istanbul, Turkey, on its way to the Black Sea on February 17. Reuters

World

Turkey recognises Russia-Ukraine 'war' and may block battleships

Turkey has agreed to enforce the 1936 Montreux Convention but says article allows ships from littoral countries to return to base

The National

February 27, 2022

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Live updates: follow the latest news on Russia-Ukraine

Turkey on Sunday officially recognised Russia's attacks on Ukraine as a "state of war" and said it was implementing an international treaty giving it the power to limit warships' passage through the strategic Dardanelles and Bosphorus straits.

"It's no longer a military operation but a state of war," Foreign Minister Mevlut Cavusoglu said.

"In this case, of course, whichever of them, it can be Russia or Ukraine, we apply the Montreux agreement."

The 1936 Montreux Convention governs the free movement of commercial ships in peacetime through the Bosphorus and the Dardanelles straits and grants Turkey the right to block warships in wartime if threatened.

Ukraine has officially asked Turkey to close the Dardanelles strait, and thus access to the Black Sea, to Russian ships.

Nato member Turkey, which has strong ties with Russia and Ukraine, did not immediately respond to this request.

  • A solemn welcoming ceremony of US soldiers at Adazi military base, Latvia, on February 25, 2022. More than 300 soldiers of the 173rd Air Force Brigade arrived to demonstrate the US commitment to defend Nato allies and strengthen Latvia's defence capabilities following Russia's military operation in Ukraine. EPA
    A solemn welcoming ceremony of US soldiers at Adazi military base, Latvia, on February 25, 2022. More than 300 soldiers of the 173rd Air Force Brigade arrived to demonstrate the US commitment to defend Nato allies and strengthen Latvia's defence capabilities following Russia's military operation in Ukraine. EPA
  • US paratroopers in Ukraine's western Lviv region during a Nato-sponsored training exercise in 2020. AP
    US paratroopers in Ukraine's western Lviv region during a Nato-sponsored training exercise in 2020. AP
  • A US military aircraft takes off at the US Air Base Ramstein, in Landstuhl, Germany, on February 25. US President Joe Biden February 24 authorised the deployment of further armed forces to Germany as part of Nato's response to Russia's military aggression on Ukraine. EPA
    A US military aircraft takes off at the US Air Base Ramstein, in Landstuhl, Germany, on February 25. US President Joe Biden February 24 authorised the deployment of further armed forces to Germany as part of Nato's response to Russia's military aggression on Ukraine. EPA
  • Nato Secretary General Jens Stoltenberg at the alliance's headquarters in Brussels, Belgium, on February 25. EPA
    Nato Secretary General Jens Stoltenberg at the alliance's headquarters in Brussels, Belgium, on February 25. EPA
  • A convoy of British armoured vehicles of the Royal Welsh Battlegroup on the way to Estonia, driving through Liepupe, Latvia, on February 25. British troops and equipment are heading to Estonia as part of the UK's contribution to strengthen Nato's uplift to Eastern Europe. EPA
    A convoy of British armoured vehicles of the Royal Welsh Battlegroup on the way to Estonia, driving through Liepupe, Latvia, on February 25. British troops and equipment are heading to Estonia as part of the UK's contribution to strengthen Nato's uplift to Eastern Europe. EPA
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    Protesters outside a Nato leaders virtual summit in Brussels on February 25. AP
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    A US Air Force F-35 Lightning II aircraft assigned to the 34th Fighter Squadron receives fuel from a KC-10 Extender aircraft over Poland on February 24. US Air Force/Reuters
  • US military personnel check an Apache attack helicopter AH-64 during a technical stop on the tarmac at Traian Vuia International Airport in Timisoara, Romania, on February 24. EPA
    US military personnel check an Apache attack helicopter AH-64 during a technical stop on the tarmac at Traian Vuia International Airport in Timisoara, Romania, on February 24. EPA
  • German soldiers of the Nato enhanced Forward Presence (EFP) Battalion Battle Group in Lithuania attend a ceremony during a visit of German Defence Minister Christine Lambrecht to Rukla Military Base, Lithuania, on February 22. EPA
    German soldiers of the Nato enhanced Forward Presence (EFP) Battalion Battle Group in Lithuania attend a ceremony during a visit of German Defence Minister Christine Lambrecht to Rukla Military Base, Lithuania, on February 22. EPA

But Mr Cavusoglu said Turkey could not prevent Russian and Ukrainian access to the Black Sea because of Article 19 of the convention, which allows littoral states' vessels to return to their home base.

He said whether the ship was registered to the home base was clear and warned against any abuse.

"It should not be involved in the war after declaring it will return to the base and passing through the Bosphorus," Mr Cavusolglu said.

Turkey has offered to host talks between leaders of the two countries.

"We have repeatedly called for a diplomatic solution but the war is a reality right now," President Recep Tayyip Erdogan's top press aide, Fahrettin Altun, tweeted on Sunday.

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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. 

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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. 

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