Construction work under way on the Yavuz Sultan Selim Bridge, which was completed in 2016. Sedat Suna / EPA
Construction work under way on the Yavuz Sultan Selim Bridge, which was completed in 2016. Sedat Suna / EPA
Construction work under way on the Yavuz Sultan Selim Bridge, which was completed in 2016. Sedat Suna / EPA
Construction work under way on the Yavuz Sultan Selim Bridge, which was completed in 2016. Sedat Suna / EPA

Turkish opposition challenges conglomerates that ‘exploit’ the economy


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When Turkey's main opposition leader pledged to nationalise the assets of the "gang of five" this week, the reference was obvious to TV viewers around the country.
Under President Recep Tayyip Erdogan, five conglomerates have benefited from multibillion-dollar contracts for infrastructure mega projects that have characterised the 18-year rule of his Justice and Development Party (AKP).
The preferential terms of these contracts and the companies' close ties to the government have earned them a generic nickname that roughly translates as "supporter companies" due to the backing they provide to the ruling party.
In a budget speech in parliament this week, Kemal Kilicdaroglu, head of the Republican People's Party (CHP), vowed to end the "order of theft", saying: "We'll nationalise and seize all the investments of this gang of five that will exploit even our grandchildren."
The five firms – Limak, Cengiz, Kolin, Kalyon and Mapa – are heavily involved in construction but have interests that span the Turkish economy, including media ownership, luxury hotels and the energy sector.
They formed the IGA consortium that built and now operates Istanbul's new airport, a €22 billion ($26.8bn) tender they won in 2013, although Kolin transferred its stake to Kalyon last year.
Like many such projects, which include ports, power stations, roads and hospitals, the airport deal took the form of a build-operate-transfer (BOT) contract. This sees the contractor run the project for a specific period of time – 25 years in the case of Istanbul airport – before passing it on to the state.
The airport contract also includes a government guarantee of revenue to IGA for a minimum number of passengers, a clause common to BOT schemes.
Although the operator said it had surpassed this figure in its first year, other BOT projects have failed to do so, at huge cost to the Turkish taxpayer.
The airport, located north-east of Istanbul near the Black Sea coast, is linked to Anatolia by a third Bosphorus crossing that opened in 2016. Yavuz Sultan Selim bridge is operated by a private group under a deal that includes a government guarantee of toll income from 135,000 cars a day.

According to reports, last year the government paid the operator 3 billion lira ($380,000) due to a shortfall in traffic, leading Turks to joke that they were paying the toll despite never having used the bridge.
These contracts are often priced in foreign currency, adding further burden on the public purse due to the falling lira, which has lost half its value since mid-2018.

A 2018 World Bank study placed Limak, Cengiz, Kolin and Kalyon in the global top 10 of public tender winners between 1990 and 2017, with Limak coming second after French energy giant Suez. While Suez won contracts around the world, the Turkish tenders were all domestic.
In September, the personal relationship between the bosses of these firms and Mr Erdogan were laid bare in a televised ceremony to open a section of the North Marmara highway, which utilises the Yavuz Sultan Selim bridge.
The owners of Cengiz, Limak and Kalyon stood in front of the guests as they were individually thanked by the president. "All thanks to you," Kalyon's chairman Cemel Kalyoncu replied.
Mr Kalyoncu, Cengiz's Mehmet Cengiz, Nihat Ozdemir of Limak, Mapa chairman Nazif Gunal and Kolin's Naci Kologlu all have long-standing ties to Mr Erdogan. Several were caught up in a corruption investigation seven years ago that targeted the president's inner circle.
According to the probe – labelled a coup attempt by Mr Erdogan, who was then prime minister and who quashed the allegations by removing thousands of police and prosecutors involved – businessmen were required to collect $450 million to purchase a newspaper and TV station to ensure their output remained supportive of the government.
Today, nearly all of Turkey's media are controlled by companies that favour Mr Erdogan.
In return, the magnates allegedly get their pick of the large construction contracts that have driven much of Turkey's growth during the AKP era.
"The reward for supporting the government could be business contracts, but the punishment for not supporting it is NOT 'no contracts;' it is getting tax fines and possibly facing bankruptcy," Mert Yildiz, a senior economist at the Burgan Bank Group, wrote in a personal blog shortly after the investigation collapsed.

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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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Ruwais timeline

1971 Abu Dhabi National Oil Company established

1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants

1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed

1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.  

1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex

2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea

2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd

2014 Ruwais 261-outlet shopping mall opens

2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies

2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export

2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.

2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery 

2018 NMC Healthcare selected to manage operations of Ruwais Hospital

2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13

Source: The National

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Tuesday, November 26: ‘All the President’s Men’ (1976) by Alan J Pakula
Saturday, December 7: ‘Timbuktu’ (2014) by Abderrahmane Sissako
Saturday, December 21: ‘Rams’ (2015) by Grimur Hakonarson

How to apply for a drone permit
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