UAE backs Cop26 commitment to reverse forest loss and land degradation


Alice Haine
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The UAE's decision to back the Glasgow Leaders’ Declaration on Forests and Land Use on Friday is a “natural step” for the country, said Mariam Al Mheiri, Minister of Climate Change and Environment, because of the nation’s rich and extensive mangrove forests.

The Cop26 commitment to halt and reverse forest loss and land degradation by 2030 aims to advance sustainable development and promote an inclusive rural transformation.

While the UAE does not have the sort of forests typically seen in the rest of the world, the country has a wealth of mangroves, which offer substantial benefits as a form of climate change.

“The environmental stewardship that we have in our DNA comes from our late founding father, Sheikh Zayed,” Ms Al Mheiri told The National.

“He was such an advocate for the environment and it's kind of lived through us. And if we look back at how he treated and respected the environment, it's a natural step for us to be part of this declaration.”

More than 90 countries supported the declaration on Forests and Land Use at the Cop26 summit, which has garnered the support of world leaders, financiers, global companies and civic leaders to promote the positive effects of forests and land use on the climate, people, economic development and biodiversity.

We have about 60 million mangroves in the UAE currently existing and we want to increase that moving forward to 30 million more
Mariam Al Mheiri,
Minister of Climate Change and Environment

"While the UAE does not have a typical Amazon forest, it does have mangrove forests," Ms Al Mheiri said.

"This is our type of forests and these act as carbon sinks. It is nature's treasure."

Only 10 square kilometres of mangrove forest can store the same amount of carbon as 50 sq km of tropical upland forest.

Developing underwater mangrove forests can also reduce harmful carbon emissions and protect coastal areas from erosion caused by waves, marine currents and human activity, such as construction.

To expand its blue-carbon ecosystems, the UAE has already committed to planting 30 million mangroves by 2030 in its second Nationally Determined Contribution.

"We have about 60 million mangroves in the UAE currently existing and we want to increase that moving forward to 30 million more," Ms Al Mheiri said.

The planting process uses innovative drone technology to sow the mangrove seeds, a goal supported by the country’s Plantation Rehabilitation Programme, which is restoring a number of plants, especially rare species and those on the brink of extinction.

Separately, the drones have been used to sow tree seeds to reduce sand encroachment and disperse 6 million acacia seeds and 250,000 ghaf seeds across 25 sites in the UAE.

Meanwhile, a UAE Smart Map of Natural Capital “will help developers understand when there's an area of natural habitat” and “how they capitalise on this” in a way that still preserves the habitat, Ms Al Mheiri said.

Stressing that the UAE is also part of the Global Ocean Alliance, she said: “We make nature our ally.

“The UAE is taking an active role on the biodiversity efforts because if you don't partner with nature, you're not going to get very far."

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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. 

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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Updated: November 06, 2021, 12:36 AM