Congress chaos prevented Iraq delegation visit to Washington, says US think tank

The Republican Party's protracted inability to select a speaker of the US House of Representatives last month disrupted plans for an Iraqi delegation's trip to Washington for a conference, the hosting think tank has told The National.

The Atlantic Council last week convened a conference on “Iraq’s future in an evolving landscape”, with speakers including Nazar Al Khirullah, Iraq's ambassador to the US, a virtual visit by Baghdad's climate envoy Fareed Yasseen and former State Department officials.

An Atlantic Council representative said the organisation had planned to bring Mohammed Al Halbousi, Speaker of the Iraqi Parliament, to the conference but the lack of a speaker in the US Congress played a role in his staying in Baghdad due to the lack of a “counterpart” in Washington to receive him.

Mr Halbousi leads Al Takadum (Progress) Movement, a Sunni political party that holds the largest number of seats in Iraq's Parliament.

The Atlantic Council representative added it had been planning for a wider parliamentary delegation visit for the conference.

The lack of leadership in Congress, after Kevin McCarthy was voted out by rebels in his own Republican Party, for 23 days stalled the US legislature's capacity to respond to the Israel-Gaza war and make advances on funding the national budget.

The Baghdad parliamentary delegation's decision to sit out the Washington visit shows that the domestic infighting affected US foreign and diplomatic engagements.

The House last week voted in a new speaker, right-wing 2020 election denier Mike Johnson.

With the legislative branch back in motion, President Joe Biden's administration has requested $106 billion to fund aid for Ukraine and Israel as well as support for US border security. The White House request also includes money for Taiwan, which is facing threats from China.

But that proposal faces stiff opposition from Mr Johnson and his Republicans.

Mr Johnson has rejected the White House request and this week countered with a significantly smaller bill that includes $14.3 billion for Israel and cuts to the Internal Revenue Service.

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