Protesters sit outside tents at the site of a demonstration in Colombo, Sri Lanka. Many Tamils have fled the country for India. Getty
Protesters sit outside tents at the site of a demonstration in Colombo, Sri Lanka. Many Tamils have fled the country for India. Getty
Protesters sit outside tents at the site of a demonstration in Colombo, Sri Lanka. Many Tamils have fled the country for India. Getty
Protesters sit outside tents at the site of a demonstration in Colombo, Sri Lanka. Many Tamils have fled the country for India. Getty

Indian ministers hold emergency meeting on Sri Lanka and Tamil refugee crisis


Taniya Dutta
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A sudden surge of refugees fleeing political and economic meltdown in Sri Lanka has prompted a meeting of leading politicians in India.

The external affairs and finance ministers were due to lead a cross-party meeting on Tuesday to discuss the fallout from the Sri Lankan crisis and ways in which India can help, after significant numbers of refugees poured into the southern state of Tamil Nadu.

It comes after a meeting on Sunday involving the Tamil political parties Dravidian Progressive Federation and the All India Anna Dravida Munnetra Kazhagam, in which Prime Minister Narendra Modi’s government was urged to intervene in the crisis.

Sri Lanka, a nation of 22 million, is located off the southern coast of India, about 450 kilometres from Tamil Nadu, and concerns are rising over the condition of the island’s Tamil population and the latest migration to the Indian state.

Sri Lankan Tamils, also known as Eelam Tamils, fled en masse to the Indian state during and after the civil war in Sri Lanka from 1983 to 2009, but the region is now receiving an influx because of the current crisis.

Their plight is an emotional issue in India's Tamil-dominated state and often involves demands from politicians for direct intervention.

Finance Minister Nirmala Sitharaman is expected to focus on the country’s crippled economy and the support India can provide, while External Affairs Minister Subramanyam Jaishankar is likely to decide on India’s position in the continuing political turmoil.

India has so far maintained a hands-off role in Sri Lanka’s political crisis but has said it will support democracy, whatever the outcome.

Other issues 'not bothering India'

Mr Jaishankar last week said India wanted to help Sri Lanka weather its current economic storm.

“India’s focus is on the economic aspects. Other issues are not bothering India," he said.

The country has already sent aid through other channels, provided a line of credit for fuel purchases and pledged support of more than $3.8 billion for “ameliorating the serious economic situation” in Sri Lanka.

India has sent tonnes of rice, medicine and milk powder to the ailing country since April.

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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

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.

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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.

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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. 

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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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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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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

England's lowest Test innings

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Updated: July 19, 2022, 11:35 AM