Teacher Samuel Paty was beheaded in Paris last year by an extremist. Reuters
Teacher Samuel Paty was beheaded in Paris last year by an extremist. Reuters
Teacher Samuel Paty was beheaded in Paris last year by an extremist. Reuters
Teacher Samuel Paty was beheaded in Paris last year by an extremist. Reuters

France approves separatism law to tackle extremism


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The French National Assembly on Friday passed an "anti-separatism" bill designed to combat the threat posed by extremists.

The bill has split opinion in France's legislature but was approved by the comfortable margin of 49 votes to 19, with five abstentions.

It contains a series of measures to tackle extremism but has been criticised as anti-Muslim, a charge Prime Minister Jean Castex staunchly denied back in December last year.

"This legislation is not legislation against religions, nor against the Muslim religion in particular. It is a law of emancipation in the face of religious fanaticism," Mr Castex told ministers at the time.

What's in the separatism bill?

Following the murder of teacher Samuel Paty by an extremist in Paris last year, anyone found guilty of endangering civil servants by spreading information which could identify them faces fines of up to €45,000 ($53,000) and three years in jail.

Religious groups will have to declare donations from abroad of over €10,000 and local authorities have been given the power to shut down places of worship that proselytise anything deemed hateful or discriminatory. Online hate speech has also been criminalised.

People representing the French state, in either the public or private sector, will have to plight their troth to the principles of secularism and neutrality in public service. One consequence is the end of public swimming pools with male and female-only lanes for religious reasons.

The state has also given itself more power to intervene in cases where it feels female dignity has been compromised and to annul the contracts of companies granted state subsidies should they not adhere to the country's values.

Separatism bill unites left and right in opposition

Both the Socialists and the centre-right Les Republicains voted down the bill. At the extremities of the continuum, so did the French Communist Party, while Marine Le Pen's far-right National Rally abstained.

The parties who voted for the bill were President Emmanuel Macron's ruling La Republique En Marche party and its two allies.

Mr Macron, currently in Japan for the opening ceremony of the Tokyo Olympics, has been accused of pandering to the right in recent months in an attempt to ward off the threat posed by the French nationalist Ms Le Pen, whose star has risen again following a series of terrorist attacks in France last year.


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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: July 24, 2021, 10:33 AM