US probes Turkey over ‘discriminatory’ taxes

US Trade Representative Robert Lighthizer. (File photo)
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Updated 05 June 2020
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US probes Turkey over ‘discriminatory’ taxes

  • If Ankara’s scheme is found to be unfairly targeting American tech firms, there may be action

ANKARA: The US has launched an investigation into new digital services taxes (DST) brought in by Turkey to see if they unfairly discriminate against American businesses.

The Office of the US Trade Representative (USTR) announced on Wednesday that it would be scrutinizing the Turkish taxes along with similar levies adopted or being considered by the EU, the UK, India, Italy, Austria, Spain, Brazil, the Czech Republic, and Indonesia.

Authorities in all of the countries being probed have until July 15 to provide their public comments to the USTR.

If the Turkish tax scheme is found to be unilaterally and unfairly targeting US tech companies such as Facebook, Amazon, Netflix, and Google, the country may face US tariffs on strategic products.

In a statement, US trade representative, Robert Lighthizer, said: “(American) President (Donald) Trump is concerned that many of our trading partners are adopting tax schemes designed to unfairly target our companies. We are prepared to take all appropriate action to defend our businesses and workers against any such discrimination.”

Turkey introduced a new DST law in December 2019 to collect revenues derived from digital services provided by multinational companies having no headquarters in Turkey. The controversial legislation targets tech firms having a high number of users within Turkish territories, but which pay little in tax.

However, compared to similar laws in other countries, Turkey’s DST rate is one of the highest in the world.

All companies having revenues in Turkey worth 20 million Turkish lira (2.6 million euros) and consolidated group revenue of 750 million euros or more, should pay DST – that is 7.5 percent of gross revenue from sales in Turkey, applicable from April 1.

Online advertising services, sales of digital content, and digital platform services will be taxed under the new law.

Experts believe that the US move to investigate Turkey is aimed at restricting other countries from adopting similar taxes that hit American businesses.

Dr. Erdal Ekinci, a partner at Istanbul-based Esin Attorney Partnership, said the USTR might argue that Turkey’s DSTs give “less favorable” treatment to US service suppliers than to their EU and local competitors.

If Ankara did not take a backstep, the US could retaliate in a similar way as it did with France. In December, the US proposed increasing tariffs by up to 100 percent on $2.4 billion worth of French products after the country’s digital taxes were found to be discriminatory for US companies. Consequently, France had to suspend the digital tax until the conclusion of relevant talks at the Organization for Economic Cooperation and Development.

Technology expert, Burak Dalgin, told Arab News that there was a risk of double taxation in Turkey in terms of digital services provision. “The multinational companies have to pay both taxes for their digital services and also for withholding tax for their operations in Turkey. Such taxation schemes should be designed via international consultation,” he said.

Dalgin, who is a founding member of Turkey’s new breakaway DEVA Party led by ex-finance tsar Ali Babacan, noted that Turkey would appoint an ambassador to Silicon Valley (in California) if the fledgling party came to power.

“We need a comprehensive perspective that develops our technology ecosystem, not the other way around,” he added.

Currently, only Google has a liaison office in Istanbul, while Netflix may open an office soon. According to sector data, total revenues generated by technology giants based in Turkey are about $2.3 billion.

“The Turkish DST rate of 7.5 percent is also extremely high compared to other jurisdictions that are generally around 2 percent or 3 percent, such as 2 percent in the UK or 3 percent in France,” Ekinci said.

“If the USTR imposes sanctions to Turkey, it would definitely affect adversely the economic and commercial relationship between the two countries. Those sanctions may be the introduction of new additional customs duties and importation regime restrictions to the products exported from Turkey to the US,” he added.

During the first quarter of 2020, the US ranked second among Turkey’s import activities, and was the fifth destination country exporting Turkish products.

Ekinci said: “The Turkish government may compare the state income generated through the DSTs collected from the US companies and the economic burden of those sanctions, and as a result of this comparison, Turkey may choose to revise the DST legislation in a way to eliminate any discrimination claims.”


Mother of jailed UK-Egyptian activist reaches 100th day of hunger strike

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Mother of jailed UK-Egyptian activist reaches 100th day of hunger strike

Laila Soueif, a 68-year-old mathematics professor, has called on the UK government to do more to secure the release of her son
“Unfortunately, the government seems to be waiting for me to be hospitalized before they act decisively to secure my son’s freedom,” she said in a statement.

CAIRO: The mother of British-Egyptian activist Alaa Abdel Fattah reached the 100th day of her hunger strike protesting her son’s continued imprisonment on Tuesday, according to her family.
Laila Soueif, a 68-year-old mathematics professor, has called on the UK government to do more to secure the release of her son, a longtime dissident who has spent much of the last decade behind bars.
“Unfortunately, the government seems to be waiting for me to be hospitalized before they act decisively to secure my son’s freedom,” she said in a statement.
Her family Soueif has survived on “nothing but black coffee, herbal tea and three packets of rehydration salts a day” since September 29.
Her son was expected to be released on that day after completing his five-year sentence for “spreading false news” by sharing a Facebook post on torture in Egypt’s prisons.
But he wasn’t freed and his family learnt that the two years he spent in pre-trial detention did not count toward his sentence. Abdel Fattah has remained in prison since.
Soueif and her two daughters have held near-weekly protests outside the Foreign Office in London in recent months, calling on Foreign Secretary David Lammy to intervene.
Britain’s top diplomat met Soueif in November, following questioning from Parliament on the government’s approach to Abdel Fattah’s case, amid claims it had prioritized trade and diplomatic ties with Cairo.
Abdel Fattah, 43, was a key figure in the 2011 uprising that toppled Hosni Mubarak’s three-decade rule over Egypt.
He continued to be a voice of dissent in the following years, protesting a government crackdown in which rights groups say tens of thousands have been jailed.
Cairo has in recent years made overtures to repair its human rights record, freeing hundreds of political prisoners.
However, rights groups say at least three times as many were arrested over the same period.


The mother of British-Egyptian activist Alaa Abdel Fattah reached the 100th day of her hunger strike protesting her son’s continued imprisonment on Tuesday, according to her family. (AP/File)

Erdogan warns no place for 'terrorist' groups in Syria

Updated 18 min 12 sec ago
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Erdogan warns no place for 'terrorist' groups in Syria

  • There is no place for "terrorist organisations or affiliated elements in the future of the new Syria," Erdogan said
  • Ankara accuses one leading Kurdish force in Syria, the People's Protection Units (YPG), of links to the outlawed Kurdistan Workers Party (PKK) in Turkiye

ISTANBUL: Turkish President Recep Tayyip Erdogan on Tuesday said there was no place for "terrorist organisations" in Syria under its new Islamist leaders, in a warning regarding Kurdish forces there.
The fall of Syrian strongman Bashar al-Assad last month raised the prospect of Türkiye intervening in the country against Kurdish forces accused by Ankara of links to armed separatists.
Erdogan's comment came during a meeting in Ankara with the prime minister of Iraq's Kurdish region, Masrour Barzani, the Turkish leader's office said in a statement.
Erdogan told Barzani that Türkiye was working to prevent the ousting of Assad in neighbouring Syria from causing new instability in the region.
There is no place for "terrorist organisations or affiliated elements in the future of the new Syria," Erdogan said.
Ankara accuses one leading Kurdish force in Syria, the People's Protection Units (YPG), of links to the outlawed Kurdistan Workers Party (PKK) in Türkiye.
The PKK has fought a decades-long insurgency against the Turkish state and is banned as a terrorist organisation by Ankara and its Western allies.
The Turkish military regularly launches strikes against Kurdish fighters in Syria and neighbouring Iraq, accusing them of PKK links.
On Monday, Turkish Foreign Minister Hakan Fidan said: "The elimination of the PKK/YPG is only a matter of time."
He cited a call by Syria's new leader Ahmed al-Sharaa, whose HTS group has long had ties with Türkiye, for the Kurdish-led forces to be integrated into Syria's national army.
The United States has backed the YPG in its fight against the jihadist movement Islamic State (IS), which has been largely crushed in its former Syrian stronghold.
But Fidan warned that Western countries should not use the threat of IS as "a pretext to strengthen the PKK".


Hamas stands by demand for end to Gaza war under hostage deal, as Trump deadline approaches

Updated 26 min 59 sec ago
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Hamas stands by demand for end to Gaza war under hostage deal, as Trump deadline approaches

  • Both sides accuse the other of blocking a deal by adhering to conditions that torpedoed all previous peace efforts for more than a year
  • Hamas says it will free its remaining hostages only if Israel agrees to end the war

JERUSALEM/CAIRO: Hamas stood by its demand on Tuesday that Israel fully end its assault on Gaza under any deal to release hostages and said US President-elect Donald Trump was rash to say there would be “hell to pay” unless they go free by his Jan. 20 inauguration.
Officials from the Islamist group and Israel have been holding talks with Qatari and Egyptian mediators in the most intensive effort for months to reach a ceasefire in Gaza.
The outgoing US administration has called for a final push for a deal before Joe Biden leaves office, and many in the region now view Trump’s inauguration as an unofficial deadline.
But with the clock ticking, both sides accuse the other of blocking a deal by adhering to conditions that torpedoed all previous peace efforts for more than a year.
Hamas says it will free its remaining hostages only if Israel agrees to end the war and withdraw all its troops from Gaza. Israel says it will not end the war until Hamas is dismantled and all hostages are free.
“Hamas is the only obstacle to the release of the hostages,” the director general of Israel’s foreign ministry, Eden Bar Tal, told a briefing with reporters, saying Israel was fully committed to reaching a deal.
Hamas official Osama Hamdan, who held a news conference in Algiers, said Israel was to blame for undermining all efforts to reach a deal.
While he said he would not give details about the latest round of negotiations, he reiterated the Hamas conditions of “a complete end to the aggression and a full withdrawal from lands the occupation invaded.”
Commenting on Trump’s threat that there would be “hell to pay” unless all hostages were freed before the inauguration, Hamdan said: “I think the US president must make more disciplined and diplomatic statements.”
Israel has sent a team of mid-ranking officials to Qatar for talks brokered by Qatari and Egyptian mediators. Some Arabic media reports said David Barnea, the head of Mossad, who has been leading negotiations, was expected to join them. The Israeli prime minister’s office did not comment.
In one notable step toward a deal, a Hamas official told Reuters on Sunday the group had cleared a list submitted by Israel of 34 hostages who could be freed in the initial phase of a truce, alongside Palestinian prisoners held by Israel.
The list included female Israeli soldiers, plus elderly, female and minor-aged civilians. Israeli Prime Minister Benjamin Netanyahu’s office said Israel had so far received no confirmation about whether those on its list were still alive.

STRIKES KILL 10 PALESTINIANS
Nearly 46,000 Palestinians have been killed in Israel’s assault on Gaza, according to health officials in the enclave. The assault was launched after Hamas fighters stormed Israeli territory in October 2023, killing 1,200 people and capturing more than 250 hostages, according to Israeli tallies.
Israeli military strikes killed at least 10 Palestinians across the Gaza Strip on Tuesday, medics said, as the health ministry in the Hamas-run territory urged international donors to immediately provide fuel to maintain medical services.
One of those strikes killed four people in a house in Beach camp in Gaza City, while the remaining six were killed in separate strikes across the enclave, medics said.
The health ministry said hospitals were running out of fuel to operate generators and maintain medical services across Gaza because of Israeli restrictions.
Israel has repeatedly said it facilitated the delivery of fuel and medical supplies to hospitals in the enclave, even in areas where forces have active operations.
On Tuesday, the military said 240 Palestinians its forces had detained in a raid on Kamal Adwan Hospital in northern Gaza last month had provided “substantial intelligence.”
The military released footage of the interrogation of a purported Hamas militant who detailed how militants “operated from the hospital area” and transferred weapons to and from it.
Hamas and the health ministry deny any armed presence at the hospital.


Global cooperation ‘flatlined’ amid rising conflicts: WEF report

Updated 41 min 50 sec ago
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Global cooperation ‘flatlined’ amid rising conflicts: WEF report

  • Multilateral bodies failing to resolve wars, says WEF’s Borge Brende
  • Deaths at highest in 30 years, record 122m people displaced in 2024

DUBAI: Geopolitical tensions and rising conflicts in the Middle East, Ukraine and Sudan have caused global cooperation to stall after a period of growth, according to a report from the World Economic Forum.

The second edition of the Global Cooperation Barometer was launched on Tuesday, ahead of the WEF’s annual meeting in Davos from Jan. 20 to 24.

The report, developed in collaboration with McKinsey & Co., found that cooperation was increasing positively over a decade, surpassing pre-COVID-19 levels but stagnated over the past three years due to geopolitical instability.

However, collaboration has continued in various other areas including vaccine distribution, scientific research and renewable energy development, the reported stated.

“The concern with a stalled level of cooperation is that as the world enters the second half of the decade, with critical global deadlines ahead, progress is not where it needs to be,” said Borge Brende, president and CEO of the WEF, during the report’s online launch event.

This rise in global security issues and record levels of humanitarian crises were due to the inability of multilateral institutions to prevent and resolve conflicts in recent years, the report found.

According to UN figures, the number of conflict-related deaths has risen to the highest levels in 30 years, with a record number of 122 million people displaced as of 2024, double the number from a decade ago.

Brende urged the international community to unify and address the mounting geopolitical tensions and competition as leaders approach a highly “complex and uncertain” world.

“The Barometer is being released at a moment of great global instability and at a time when many new governments are developing agendas for the year, and their terms, ahead,” Brende said.

“What the Barometer shows is that cooperation is not only essential to address crucial economic, environmental and technological challenges, it is possible within today’s more turbulent context.”

The Barometer uses 41 indicators to measure global cooperation between 2012 and 2023 across five pillars: trade and capital flows, innovation and technology, climate and natural capital, health and wellness, and peace and security.

Positive momentum in climate finance, trade and innovation offered hope, the report stated.

“Advancing global innovation, health, prosperity and resilience cannot be done alone,” said Bob Sternfels, global managing partner at McKinsey & Co.

“Leaders will need new mechanisms for working together on key priorities, even as they disagree on others, and the past several years have shown this balance is possible.”

He urged world leaders to embrace “disordered” cooperation, as well as develop adaptive and solutions-driven decision-making to navigate a turbulent global landscape.

“By pivoting towards cooperative solutions, leaders can rebuild trust, drive meaningful change and unlock new opportunities for shared progress and resilience in the complex years ahead,” he said.

According to the UN, just 17 percent of the Sustainable Development Goals are on track to meet the 2030 deadline.

The advancement of cooperation in innovation in 2023 drove the adoption of new technologies that benefited multiple areas of life. However, the WEF warned that emerging technologies such as artificial intelligence was reshaping the global landscape, raising the possibility of an “AI arms race.”

“Cooperative leadership and inclusive strategies will be key to harness its vast potential while tackling risks,” according to experts quoted in the report.

The report found that cooperation on climate goals improved over the past year, with increased finance flows and higher trade in low-carbon technologies such as solar, wind and electric vehicles. Yet, urgent action was still required to meet net-zero targets as global emissions continue to rise.

According to UN figures, global temperatures have risen to record levels, with 2024 being the hottest year on record.

Health outcomes, including life expectancy, continued to improve post-pandemic, but overall progress was slowing compared to pre-2020. Brende warned that forging collaboration in a highly fragmented world was crucial to address cross-border challenges.

Seven million people died from COVID-19, while the US has reported the first human death linked to bird flu on Tuesday. Cybercrime cost the world $2 trillion in 2023, he added.

“With pandemics, there is no other way than using the tools we have for early warnings. We have to come together and put all resources to move much faster than we did.

“COVID-19 was the worst pandemic we had seen in 100 years, but I don’t think it will take 100 years before we see the next pandemic,” warned Brende.

The report revealed that although cross-border assistance and pharmaceutical research and development have declined, and cooperation on trade in health goods and international regulations stalled, various health metrics including child and maternal mortality remained strong.

Goods trade declined by 5 percent, driven largely by slower growth in China and other developing economies, while global fragmentation continued to reduce trade between Western and Eastern-aligned blocs. However, Brende said a 3 percent increase in global trade is expected this year.

Despite this, the report found global flows of services, capital and people showed resilience. Foreign direct investment surged, particularly in strategic sectors including semiconductors and green energy, while labor migration and remittances rebounded strongly, surpassing pre-pandemic levels.

“There should be enough common interest to collaborate even in a competitive world. So I hope that this Barometer will then be a useful tool for leaders around the world to know where we stand today, as well as the risks and opportunities we face,” he said.

The WEF’s annual meeting will convene global leaders under the theme “Collaboration for the Intelligent Age.” The meeting aims to foster new partnerships and insights in an era of rapidly advancing technology.


Mediator Qatar confirms ‘technical meetings’ on Gaza truce ongoing

Updated 07 January 2025
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Mediator Qatar confirms ‘technical meetings’ on Gaza truce ongoing

DOHA: Talks aimed at cementing a truce in Gaza between Israel and Hamas are ongoing, with “technical meetings” taking place between the parties, mediator Qatar’s foreign ministry said Tuesday.
“The technical meetings are still happening between both sides,” ministry spokesman Majed Al-Ansari said, referring to meetings with lower-level officials on the details of an agreement. “There are no principal meetings taking place at the moment.”
Mediators Qatar, Egypt and the United States have been engaged in months of talks between Israel and Hamas that have failed to end the devastating conflict in Gaza.
Ansari said there were “a lot of issues that are being discussed” in the ongoing meetings, but declined to go into details “to protect the integrity of the negotiations.”
Hamas said at the end of last week that indirect negotiations in Doha had resumed, while Israel said it had authorized negotiators to continue the talks in the Qatari capital.
A previous round of mediation in December ended with both sides blaming the other for the impasse, with Hamas accusing Israel of setting “new conditions” and Israel accusing Hamas of throwing up “obstacles” to a deal.
In December, the gas-rich Gulf emirate expressed optimism that “momentum” was returning to the talks following Donald Trump’s election victory in the United States.
A month earlier, Doha had said it was putting its mediation on hold, and that it would resume when Hamas and Israel showed “willingness and seriousness.”