Turkey cemented its involvement in the Libyan conflict on Saturday when Defence Minister Hulusi Akar visited the country.
Four days earlier, the Turkish Parliament voted to extend by 18 months a one-year presence in the country, which came into effect in January after an agreement with the Government of National Accord in Tripoli.
The GNA and rival House of Representatives in the east reached a UN-brokered ceasefire in October, which called for the departure of all foreign forces and mercenaries within three months.
Turkish media called the defence minister’s visit a “surprise inspection” of Turkish forces.
Mr Akar’s apparently unscheduled visit could be seen as Ankara challenging the government in the east and its powerful backer, Field Marshal Khalifa Haftar.
Field Marshal Haftar vowed to repel the Turkish “colonisers” in a speech on Libya’s Independence Day, December 24.
On Sunday, Mr Akar said Field Marshal Haftar’s forces would become targets if they attacked Turkish forces in the region.
‘Drive out the colonisers’
By intervening in Libya’s conflict, Turkey has expanded its footprint across the Arab world.
It has provided troops, weapons, training and Syrian mercenaries to the GNA in a move widely condemned by the international community.
It occupied much of northern Syria, which has a large ethnically Kurdish population, and Turkish troops have continued to stage raids against Kurdish separatist fighters in northern Iraq.
Since 2016, Turkey has established several military bases in the Kurdish region of Iraq, causing tension with the Iraqi government in Baghdad.
Ankara continues to breach Libya’s borders to further its interests in the country, which has vast oil and gas resources beneath the Eastern Mediterranean and sits on Africa’s largest proven crude oil reserves.
Last year, Turkish President Recep Tayyip Erdogan signed a deal with the GNA that demarcated each country’s maritime boundaries, with the aim of drilling in the Eastern Mediterranean and within Greek territory.
The move sparked a row that involved regional and international powers.
In return for access to these resources, Mr Erdogan wanted to tip the conflict in favour of the GNA and its allied militias.
Backed by a regional alliance and local militias in eastern Libya, Field Marshal Haftar is regarded as a bastion against an Ottoman-style strongman.
Critics say Mr Erdogan is acting as a populist leader with a desire for aggressive adventurism in foreign countries.
These perceptions are not helped by the names of ships in the Turkish flotilla sent to explore for oil and gas in disputed parts of the Mediterranean.
Turkey's seismic exploration ship, the Oruc Reis, is named after the Ottoman admiral popularly known as Barbarossa.
The naval escort for the Oruc Reis is the Kemal Reis, named after a 15th century Ottoman admiral.
In his speech on Thursday to mark the 69th anniversary of Libyan independence, Field Marshal Haftar said there would be “no peace in the presence of a coloniser on our land” and called on his forces to get ready.
“We will therefore take up arms again to fashion our peace with our own hands … and, since Turkey rejects peace and opts for war, prepare to drive out the occupier by faith, will and weapons,” he said.
COMPANY PROFILE
Company name: SimpliFi
Started: August 2021
Founder: Ali Sattar
Based: UAE
Industry: Finance, technology
Investors: 4DX, Rally Cap, Raed, Global Founders, Sukna and individuals
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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