• A Taliban fighter prays next to a demonstration organised by the Afghan Society of Muslim Youth, demanding the release of frozen international money in Kabul, Afghanistan. AP Photo
    A Taliban fighter prays next to a demonstration organised by the Afghan Society of Muslim Youth, demanding the release of frozen international money in Kabul, Afghanistan. AP Photo
  • A Taliban fighter and a group of Afghan men attend Friday prayers in Kabul. AP Photo
    A Taliban fighter and a group of Afghan men attend Friday prayers in Kabul. AP Photo
  • Taliban soldiers in Bagram Air Base in Parwan. Reuters
    Taliban soldiers in Bagram Air Base in Parwan. Reuters
  • Taliban soldiers Seifatollah and Vasighollah stand in a prison in Bagram Air Base. Reuters
    Taliban soldiers Seifatollah and Vasighollah stand in a prison in Bagram Air Base. Reuters
  • Taliban patrol Kabul. EPA
    Taliban patrol Kabul. EPA
  • Vahdat, a Taliban soldier and former prisoner, stands next to exercise equipment in Bagram Air Base. Reuters
    Vahdat, a Taliban soldier and former prisoner, stands next to exercise equipment in Bagram Air Base. Reuters
  • A Taliban fighter stands guard near Zanbaq Square in Kabul. AFP
    A Taliban fighter stands guard near Zanbaq Square in Kabul. AFP
  • Taliban fighters police a road in Herat. AFP
    Taliban fighters police a road in Herat. AFP

EU pledges extra cash to avert humanitarian crisis in Afghanistan


Jamie Prentis
  • English
  • Arabic

The EU has pledged an extra €700 million ($808.5m) in aid to Afghanistan to “avert a major humanitarian and socio-economic collapse".

The announcement by European Commission chief Ursula von der Leyen takes the bloc's emergency support package to the country and its neighbours to around €1bn.

It came on Tuesday at the start of a G20 virtual summit that focused staving off the crisis in the country and ensuring it does not become a safe haven for terrorists, less than two months after the Taliban seized its capital Kabul.

German Chancellor Angela Merkel said her country was still ready to recognise the Taliban's interim government because of its lack of inclusivity.

"We demand that all United Nations organisations have access for the humanitarian aid they wish to provide," she added.

Italian Prime Minister Mario Draghi, who convened the talks, had been pushing for the meeting of the G20 major economies, which includes China and Russia.

“The summit’s focus points include urgent humanitarian support for the Afghan population, the fight against terrorism, freedom of movement inside the country and open borders,” his office said.

The White House said: "The leaders discussed the critical need to maintain a laser-focus on our enduring counter-terrorism efforts, including against threats from ISIS-K, and ensuring safe passage for those foreign nationals and Afghan partners with documentation seeking to depart Afghanistan."

Since the Taliban's lightning takeover of Afghanistan and the withdrawal of Nato forces after two decades, the international community has grappled with how to approach the new rulers in Kabul.

“Our conditions for any engagement with the Afghan authorities are clear, including on human rights. But the Afghans should not pay the price of the Taliban’s actions,” said Ms von der Leyen.

The Afghan economy has virtually collapsed, with international aid cut off, rising food prices and increasing unemployment.

There are also concerns over security, the presence of ISIS-K, the rights of women, girls and minorities, and guaranteeing safe passage abroad for thousands of Afghans who worked for Nato but remain in the country.

Mr Draghi said of the G20 summit: “We want to see if it's possible for the 20 richest countries in the world to have common objectives.”

China has called for the removal of unilateral sanctions on Afghanistan and for its foreign exchange reserves, which are currently frozen, to be released.

“I hear endlessly that a humanitarian catastrophe is about to happen because Afghanistan has no support from the rest of the world,” said Mr Draghi, whose country holds the rotating G20 presidency.

“I think it's the duty of the world's richest countries to do something to avoid a humanitarian catastrophe.”

He said the summit would assess the measures that can be taken “to stop Afghanistan from again becoming a hotbed of international terrorism".

Indian Prime Minister Narendra Modi was among those to attend the meeting, although China's Xi Jinping and Russia's Vladimir Putin sent representatives.

The Taliban is itself seeking international recognition and assistance to avoid a humanitarian disaster. While countries such as the US and the UK have sent officials to Kabul for talks with the hardline group, no country has yet recognised its interim government.

  • A man selling balloons at night in Kabul a month since the start of Taliban rule. All photos by Stefanie Glinski
    A man selling balloons at night in Kabul a month since the start of Taliban rule. All photos by Stefanie Glinski
  • Children stand outside the former US embassy in Kabul where the banner of the 'Islamic Emirate' has replaced previous murals.
    Children stand outside the former US embassy in Kabul where the banner of the 'Islamic Emirate' has replaced previous murals.
  • Evenings in Kabul have seen children joined by fighters buying fruit juice and ice cream.
    Evenings in Kabul have seen children joined by fighters buying fruit juice and ice cream.
  • Taliban fighters sit awaiting for their fruit juice among civilians.
    Taliban fighters sit awaiting for their fruit juice among civilians.
  • Children stand outside the former US embassy in Kabul where the banner of the 'Islamic Emirate' has replaced previous murals.
    Children stand outside the former US embassy in Kabul where the banner of the 'Islamic Emirate' has replaced previous murals.
  • Street-working children are selling Taliban flags and bandanas in Kabul.
    Street-working children are selling Taliban flags and bandanas in Kabul.
  • Taliban fighters stand outside the Ministry of Women's Affairs, not part of the new government.
    Taliban fighters stand outside the Ministry of Women's Affairs, not part of the new government.

“We want positive relationships with the whole world,” said the Taliban's acting foreign minister, Amir Khan Muttaqi.

“We believe in balanced international relations. We believe such a balanced relationship can save Afghanistan from instability.”

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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. 

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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

Updated: October 12, 2021, 3:10 PM