Abu Dhabi // The recalling of three Gulf ambassadors from Doha on Wednesday was unprecedented in the history of the GCC, but comes after years of turbulent relations between Qatar and its neighbours.
The blow to diplomatic ties presents Qatar with a tough choice: will it curb a set of controversial policies and toe the line adopted by other GCC states or accept a degree of regional isolation?
What happens next remains unclear, but the controversy lays bare Doha’s damaged ties with other Gulf states.
In a joint statement on Wednesday following a meeting of foreign ministers in Riyadh, the UAE, Saudi Arabia and Bahrain said their ambassadors were withdrawn because Doha breached a regional security pact.
It was not the first time there has been a diplomatic protest between GCC countries. In 2002, Saudi Arabia withdrew its ambassador to Doha for five years in protest against the coverage of Qatar-based television network, Al Jazeera.
But the fact that this is the first time that three Gulf countries have all withdrawn their ambassadors from another member state shows that the current controversy is more serious.
“This had been coming for at least a year, two years,” said Kamal Alam, a London-based senior fellow for Middle East Regional Defence and Security Issues at The Institute for Statecraft. “It finally exploded into this.”
The riches from Qatar’s booming natural gas industry allowed it to take on a role in the region that often clashed with the view of Saudi Arabia, which aims to be the dominant force in the GCC.
Al Jazeera gave the Arab world an unprecedented international voice, but also drew critism for reporting on sensitive subjects in other Gulf states.
When the Arab Spring began in 2011, Doha was quick to back uprisings throughout the region, allying itself with the Muslim Brotherhood, which gained prominence as decades-old regimes fell in Tunisia, Egypt, and Libya.
The UAE and Saudi Arabia consider the Islamist organisation to be a destabilising force in the region.
Qatar lent financial and political support to the Brotherhood during its one year in power in Egypt. When that came to an end with President Mohammed Morsi’s downfall last summer, the UAE and Saudi Arabia were quick to replace Doha as Cairo’s main sources of economic support.
Stoking the tensions was Doha’s hosting of members of the Brotherhood, including Egyptian cleric Yousuf Al Qaradawi.
In January, Al Qaradawi made an offensive sermon about the UAE that prompted the Qatari ambassador to to summoned to the foreign ministry in Abu Dhabi where he received a formal letter of protest.
“After they sent that warning to the Qataris, they didn’t do what was expected, or required of them by the UAE and Saudi,” said Andrew Hammond, a Middle East analyst at the European Council on Foreign Relations.
Attempts to make Qatar change its policies failed, resulting in Wednesday’s withdrawal of the ambassadors.
“Basically it comes down to Qatar’s foreign policy, which is antagonising Saudi and the UAE for the past two years ...” said Mr Alam.
Michael Stephens, deputy director of the Royal United Services Institute for Defence and Security Studies said it was “quite clear Qatar will have to make a compromise here.”
The country cannot afford to become isolated from its GCC counterparts, even if its bolsters already strong ties with Iran, the US, and the UK.
Mr Stephens gave the example of Qatar needing its land border with Saudi Arabia to stay open so concrete for FIFA World Cup 2022 construction could be imported.
To overcome the damaged ties, Mr Stephens said, Qatar needs to take steps towards building its relationship with the military-backed interim government in Egypt, which removed the Muslim Brotherhood led government in July 2013.
Reigning in its regional support of the Brotherhood was another important step. “The key is adjusting its strategy on the Muslim Brotherhood,” Mr Stephen said.
Qatar “needs to reaffirm that its key foreign policy objective is to maintain the security of the GCC and the region as a whole.”
But Mr Hammond warned that reassessing ties would be more difficult than one might think.
In 2013, after Qatari Sheikh Tamim bin Hamad Al Thani took over for his father, Sheikh Hamad bin Khalifa Al Thani, the country tried to project an image of calming its pursuit of regional power to focus on domestic issues.
Doha has taken a back seat on some issues, such as the conflict in Syria. But in other areas it has not changed quickly enough. Multiple analysts believed that Sheikh Hamad still maintained influence in some affairs, despite officially leaving power.
Kuwait’s parliament speaker on Wednesday suggested the country’s emir could play a mediating role in the dispute. But the tensions are likely to be difficult to heal.
Mr Hammond said that after years of Saudi Arabia leading the region, Qatar was unlikely to alter its approach quickly. Having a direct line to the Brotherhood gives an independence that Doha cherishes, he said.
“They want to be different,” he said.
jvela@thenational.ae
What is the Supreme Petroleum Council?
The Abu Dhabi Supreme Petroleum Council was established in 1988 and is the highest governing body in Abu Dhabi’s oil and gas industry. The council formulates, oversees and executes the emirate’s petroleum-related policies. It also approves the allocation of capital spending across state-owned Adnoc’s upstream, downstream and midstream operations and functions as the company’s board of directors. The SPC’s mandate is also required for auctioning oil and gas concessions in Abu Dhabi and for awarding blocks to international oil companies. The council is chaired by Sheikh Khalifa, the President and Ruler of Abu Dhabi while Sheikh Mohamed bin Zayed, Abu Dhabi’s Crown Prince and Deputy Supreme Commander of the Armed Forces, is the vice chairman.
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Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
MATCH INFO
Quarter-finals
Saturday (all times UAE)
England v Australia, 11.15am
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Sunday
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Company name: OneOrder
Started: October 2021
Founders: Tamer Amer and Karim Maurice
Based: Cairo, Egypt
Industry: technology, logistics
Investors: A15 and self-funded
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2018 ICC World Twenty20 Asian Western Regional Qualifier
The top three teams progress to the Asia Qualifier
Final: UAE beat Qatar by nine wickets
Third-place play-off: Kuwait beat Saudi Arabia by five runs
Table
1 UAE 5 5 0 10
2 Qatar 5 4 1 8
3 Saudi 5 3 2 6
4 Kuwait 5 2 3 4
5 Bahrain 5 1 4 2
6 Maldives 5 0 5 0
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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