Key takeaways
- FTA Decision No. 13 of 2026 makes VAT supplier verification a step before reclaiming input VAT, from 1 October 2026.
- Each new supplier is checked for identity, a real place of business and risk signs, then checked again every 12 months.
- Purchases under AED 10,000 are exempt unless that supplier's total passes AED 100,000 a year.
What changed on 1 October
The Federal Tax Authority issued Decision No. 13 of 2026 on 22 July and published it on 20 August. From 1 October 2026 it sets the checks a VAT-registered business makes before it deducts input tax, under Article 54(bis) of the VAT Law.
The tax invoice still matters. What changed is the proof behind it. The FTA can now ask how you satisfied yourself that the supplier was real and the supply genuine, and it expects the answer in writing.
Checks on each supplier
These apply the first time you deal with a supplier, and again whenever the supplier has not been checked in the past 12 months.
- Identity. For a company, its incorporation through official records or its certificate, and the ID of the person who represents it. For an individual, a valid Emirates ID or passport, and a meeting in person or online before the supply.
- A real place of business, confirmed online or by a visit, that fits what the supplier sells.
- Risk signs: more than two address changes or more than two changes of key staff in 12 months, or deals out of line with the supplier's size or history. Where one applies, you keep a written explanation for the FTA.
- Above AED 375,000 a year from one supplier, a letter from a UAE bank confirming the supplier's account, and a look at public reviews and press coverage.
Checks on each purchase
Each purchase is then checked on its own facts.
- A genuine commercial reason for the deal.
- Payment by electronic means. Cash needs a documented reason and has to stay within the legal limits. A payment through a third party, or to an account outside the supplier's country, needs an explanation.
- A price or margin in line with the market.
- Goods or services within the supplier's usual and licensed activities, with the origin of goods and the supplier's right to sell them confirmed.
- A clear reason for any intermediary in the chain.
Small purchases: supplies under AED 10,000 excluding VAT are exempt from these checks. The exemption falls away once purchases from that supplier pass AED 100,000 over the past 12 months, or are expected to over the next 12.
Records and a written policy
The decision asks for proof as well as practice. Each check is documented and the supporting papers are kept, so that the FTA can verify the checks were made.
The company also needs a written policy naming who carries out the checks and who supervises them, kept with its other tax records.
Who feels it most
Trading companies with many suppliers feel it first. So does any business that buys from individuals, pays in cash or works through intermediaries. A service business with a few long-standing suppliers mostly needs to write down checks it already makes.
The checks belong in your books, kept month by month.
Our accounting and bookkeeping service can keep the supplier file and the written policy alongside your monthly records. The evidence is then ready before anyone asks. VAT returns and any FTA review go through a licensed tax agent we work with, and our corporate tax and VAT page explains how that runs.
