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Washington and Baghdad will soon begin formal talks that could end the presence of the anti-ISIS military coalition in Iraq, both governments said on Thursday, though questions remain as to whether Iraqi forces are ready to fight extremists unassisted.
US combat forces left Iraq in 2011 following the 2003 invasion, but thousands were sent back in 2014 to help Baghdad defeat ISIS.
The sustained US presence, as well as a series of strikes against Iran-backed militias in Iraq, has led to increasing calls for the Americans to leave again.
This month, Iraq's Prime Minister Mohammed Shia Al Sudani said the government was beginning the process of removing the US-led military coalition.
In a statement, US Defence Secretary Lloyd Austin said discussions would take place as part of a higher military commission that was agreed upon last year to discuss the “transition to an enduring bilateral security partnership between Iraq and the United States”.
"The Iraqi-American Higher Military Committee will resume dialogue in the coming days," Iraqi state media quoted Defence Minister Thabet Al Abbasi as saying.
"The withdrawal dates for the coalition forces will then be determined and joint co-operation relations will be built between Iraq, the United States and the coalition countries in various political, economic, cultural, security and military fields that are consistent with the vision of the Iraqi government."
He added that the Iraqi armed forces "are fully prepared for the withdrawal of the coalition forces and to take full control of security in the country".
But a senior western diplomat, whose country is a major contributor to the anti-ISIS coalition, told The National that Iraqi forces are not yet ready to suppress the terror group without more training.
The diplomat said his country would accept the end of the training mission and a transition to bilateral security arrangements, but cautioned against making decisions too quickly.
“If the Iraqis insist on finishing the coalition, we will, of course, accept that and move to bilateral co-operation. But there are real dangers to Iraq’s security if that happens too quickly,” said the diplomat.
“Western countries want to complete their training of the Iraqi security forces. They do not want to see a repeat of the mistakes of 2010-2014.
“The Iraqi army is stronger than it was but still lacks certain skills and is heavily dependent on the coalition for intelligence and logistics.”
The US leads a multinational mission of about 3,000 troops. The majority, from the US, are complemented by a Nato mission to advise and assist Iraqi security forces, including the air force.
Dutch, French, British, Italian, Australian and Canadian forces have been involved in support, while France also has a security arrangement with Baghdad.
Struggle against ISIS
The US-led anti-ISIS coalition was formed in 2014 after several Iraqi army divisions, comprising tens of thousands of soldiers, collapsed in the face of ISIS, which ultimately took over about a third of the country.
Analysts later identified chronic deficiencies in the Iraqi army including rampant corruption that eroded morale and hastened the collapse of their forces.
International forces subsequently resumed training in 2014 and sent supporting air power to strike ISIS, amid an uneasy truce with Iran-backed militias.
But since 2017, when ISIS was almost entirely defeated in the battle of Mosul, clashes have escalated between US forces and the Iran-linked militias, who are part of Iraq's Popular Mobilisation Forces, an official branch of the security services.
US-Iraq talks
The announcement of the talks follows a major escalation between the US and Iran-backed groups, after Kataib Hezbollah, which has worked closely with Tehran, launched ballistic missiles at the largest Iraqi-US base at Al Asad in western Iraq.
No American personnel were killed – although one Iraqi was injured – but the US has retaliated with air strikes on the militia and allied groups.
US forces, which are stationed with Iraqi and Kurdish troops in two major bases in western Iraq and the northern Kurdish region, as well as at a smaller base in Baghdad, have faced about 150 attacks from Iran-backed groups in Iraq and Syria since October 7, when the militias increased their attacks amid the war in Gaza.
The talks come at a time of increased instability in the Middle East, with Israel embroiled in its conflict in Gaza and a rise in attacks on Red Sea shipping by Yemen's Houthi rebels.
Since the Israel-Gaza war began, there has been an increase in attacks against US forces in Iraq and Syria by Iran-backed militias, with about 150 incidents recorded so far.
In response, the US has carried out a series of strikes on targets in Syria as well as Iraq, with the latest occurring on Tuesday to the south of Baghdad against Kataib Hezbollah.
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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