Austria says it could support EU oil embargo on Russia

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Austria on Monday joined Germany in saying it could live with an embargo on Russian oil which it had previously opposed, moving the European Union a step closer to such a move.

The Alpine country's Climate Minister Leonore Gewessler said Austria was "ready to pull its weight" if the European Commission proposes a Russian oil ban and it is approved by the EU's 27 members.

Like Germany, Austria has reduced its reliance on Russian oil and went through March without processing any of it at all, Ms Gewessler said before a meeting of the bloc's energy ministers.

It came as the EU stepped up preparations for potential fuel shortages as the ministers met in Brussels in the shadow of Russia’s threats to cut off supplies.

The emergency summit was called after Poland and Bulgaria had their Russian gas imports stopped for refusing to pay in roubles, a demand made by the Kremlin after sanctions linked to the invasion of Ukraine were imposed.

Russia had previously supplied about 40 per cent of the EU’s gas and many countries are highly reliant on those imports, leaving them vulnerable if more nations are blacklisted by Russian supplier Gazprom.

A note circulated by the French presidency invited member countries to explain how they were preparing for a potential supply crisis and what action they would like their EU neighbours to take in response.

The bloc was hoping to agree to a common line on gas amid confusion over how countries could deposit euros or dollars with Russia’s Gazprombank without breaching EU sanctions. Moscow's demand for roubles is seen as a ploy to defend its currency from those sanctions.

As countries scramble for alternative suppliers, Poland said it had started receiving gas through a new pipeline from Lithuania and that transmission via that route would increase by the end of the week.

Ministers were also expected to address gas storage for the coming winter after the European Commission proposed setting a minimum level below which stocks should not be allowed to fall.

Oil debate

The softening of Austria's position on oil cleared another potential obstacle out of the way on that front, after Germany said it was now advocating an oil embargo by late summer.

Germany had previously held out against such a move for fear of causing economic chaos at home and punishing its own consumers rather than Russia.

But Europe's largest economy now says it has sufficiently reduced its dependence on Russian oil, from about 35 per cent to 12 per cent, that it could withstand an embargo that might have to be in place for years.

Most of the remaining portion comes from an oil refinery in eastern Germany whose supplies are harder to replace because it is owned by Russian company Rosneft, but this has not stopped Berlin from changing tack on an embargo.

“A few weeks ago, we knew we couldn’t have sustained it even for a month,” said Foreign Minister Annalena Baerbock. Sanctions should remain in place until Russian troops had left Ukraine’s internationally recognised territory, she said.

“It’s very important with every sanction that we bring into force that we can sustain it for years if necessary,” she said.

But Hungary, a leading sceptic of energy sanctions, signalled on Monday that it was not yet willing to support an oil embargo, which would need to be approved by all 27 members.

“Hungary’s stance on oil and gas sanctions on Russia remains unchanged: we do not support them,” Zoltan Kovacs, a spokesman for recently re-elected Prime Minister Viktor Orban, said on Monday.

Hungary did not stand in the way of a coal embargo passed last month and had previously hinted it would allow an oil ban to pass if there were sufficient alternatives.

The Czech Republic, which will take over the EU presidency from France in July, supports the idea of jointly purchasing gas from other suppliers such as Norway.

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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Essentials

The flights
Etihad and Emirates fly direct from the UAE to Delhi from about Dh950 return including taxes.
The hotels
Double rooms at Tijara Fort-Palace cost from 6,670 rupees (Dh377), including breakfast.
Doubles at Fort Bishangarh cost from 29,030 rupees (Dh1,641), including breakfast. Doubles at Narendra Bhawan cost from 15,360 rupees (Dh869). Doubles at Chanoud Garh cost from 19,840 rupees (Dh1,122), full board. Doubles at Fort Begu cost from 10,000 rupees (Dh565), including breakfast.
The tours
Amar Grover travelled with Wild Frontiers. A tailor-made, nine-day itinerary via New Delhi, with one night in Tijara and two nights in each of the remaining properties, including car/driver, costs from £1,445 (Dh6,968) per person.