A deflated dinghy that migrants used to try to cross the English Channel. Getty Images
A deflated dinghy that migrants used to try to cross the English Channel. Getty Images
A deflated dinghy that migrants used to try to cross the English Channel. Getty Images
A deflated dinghy that migrants used to try to cross the English Channel. Getty Images

UK and France look to 're-establish co-operation' after diplomatic blows


Simon Rushton
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The UK wants to “re-establish co-operation” after a series of diplomatic rows including a newly signed submarine and defence pact and migrants reaching English shores, President Emmanuel Macron's office said on Friday.

Prime Minister Boris Johnson “reaffirmed the importance” of the London-Paris relationship but also, once again, raised the issue of migrants who camp in northern France hoping to reach the UK by sailing across the English Channel, one of the busiest shipping lanes in the world, in unseaworthy vessels.

The two leaders spoke by telephone on Friday.

“On the subject of small boat crossings in the Channel, the prime minister reiterated the UK’s position that we need to break the business model of people smugglers who put lives at risk. They agreed to intensify co-operation on this matter and agreed to keep talking on other issues,” a British government representative said.

“The prime minister also looked forward to welcoming President Macron to Glasgow in November for Cop26, and they discussed the importance of increased international action ahead of the summit on climate finance and net-zero commitments.”

The environmental Cop26 summit is being held in Scotland and the UK has been looking for stricter emissions cuts and more ambitious goals from countries trying to battle climate change.

Mr Macron was left furious last week after Australia ditched a mega-deal to buy diesel submarines from France in favour of American nuclear-powered ones — secured during secret negotiations enabled by Britain.

France lost out on a submarine building contract. Reuters
France lost out on a submarine building contract. Reuters

In the conversation, which the Elysees Palace said came at Mr Johnson's request, the British prime minister said he hoped for co-operation “in line with our values and our common interests”, such as the battle against climate change, securing the Indo-Pacific region and the fight against terrorism.

The UK government representative said: “They reaffirmed the importance of the UK-France relationship and agreed to continue working closely together around the world on our shared agenda, through Nato and bilaterally.

“The leaders noted in particular the strategic significance of our long-standing co-operation in the Indo-Pacific and in Africa, including through the joint mission in Mali.”

French fury over what it sees as a “stab in the back” over the submarine contract and the Aukus pact signed between the UK, Australia and US led to Mr Macron recall*ing the French ambassadors to Washington and Canberra in an unprecedented diplomatic protest.

But the French envoy in London remained at her post, with France's Europe Minister Clement Beaune dismissing London as a mere “third wheel” in the deal and a “junior partner” to the US.

Using franglais, Johnson this week appealed to France to “donnez-moi un break”, calling for calm after tempers flared in France, while also telling Paris to “prenez un grip” (“get a grip”).

The submarine spat brought relations between Paris and London to their worst since Britain's 2016 vote to leave the EU.

Brexit has led to several disagreements between both nations, notably over fishing rights but also the still vexing issue of trade between mainland Britain and the province of Northern Ireland.

Migrant flows have also been a major irritant between Paris and London.

There remains, however, a willingness on both sides to continue close co-operation in defence matters, experts say.

The submarine deal “created a legitimate anger in France and clearly dealt a serious blow to trust and co-operation between France and the UK in a relationship already strained by years of post-Brexit disputes,” said Hans Kundnani and Alice Billon-Galland, analysts at the Chatham House policy institute.

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Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.

The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.

Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.

However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.

Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.

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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: September 24, 2021, 6:27 PM