A valid tax invoice no longer protects your input VAT claim on its own. From 1 October 2026, UAE businesses must prove they checked the supplier behind every deduction, and the proof must exist before filing. The requirement comes from FTA Decision No. 13 of 2026 on the verification of the validity and integrity of supplies, published on the FTA website.

Since the return due on 28 October 2026 is the first filing covered for most businesses, here is what changed and what to prepare before then.

Why the FTA Introduced Mandatory Supplier Verification

The Decision gives practical effect to Article 54 bis of the VAT Law, a provision added by Federal Decree-Law No. 16 of 2025 from 1 January 2026. Under the amended law, available in the Federal Tax Authority legislation library, input tax recovery can be denied in three situations:

• The supply was part of a chain connected to tax evasion and the recipient knew it.
• The circumstances meant the recipient should have known.
• The recipient skipped the FTA’s prescribed verification measures, so the law treats the business as if required to know.

That third route is where Decision No. 13 comes in: it spells out the measures, and completing and documenting them keeps a good faith defence that skipping them gives away.

The timing fits a wider pattern. In its 2025 annual report announcement, the FTA reported AED 46 billion in VAT and Excise Tax revenues for 2025 along with 175,500 field inspection visits, and checks at that scale mean supply chains are traced rather than sampled. Documented VAT compliance in UAE practices, mapped on the linked page, now separate a routine deduction from a disputed one.

Who Must Comply, and From When

Article 2 applies the Decision to every taxable person claiming input tax on supplies received, and since registration status decides coverage rather than size or sector, Mainland, Freezone and designated zone businesses are all in scope once VAT registered. Three dates frame the transition:

• 23 June 2026: the FTA Board approved the Decision.
• 22 July 2026: the Decision was issued.
• 1 October 2026: the measures took effect under Article 7.

None of them bring a size exemption; relief for smaller purchases comes only through the thresholds below.

Supplier Checks Required Under Article 3

With the scope and timeline settled, the next question is what verification actually involves. Article 3 answers the supplier side of it: before relying on a supplier’s invoices, a business must verify four things.

Identity of the supplier

• Individual suppliers: obtain a copy of a valid Emirates ID or passport, and meet them in person or virtually before the supply.
• Corporate suppliers: confirm incorporation through official databases or a certificate of incorporation, plus the ID of the representative dealing with your business.

Place of business

Next, confirm through electronic checks or a site visit that the supplier operates from a genuine place of business consistent with its activities.

Stability and risk indicators

• Confirm the supplier has not changed its address or key personnel more than twice in the past 12 months.
• Confirm its transaction volumes fit its size and history.
• Where a red flag exists, keep a documented, justified explanation on file, since an unexplained flag is the real risk.

Enhanced checks above AED 375,000

Where supplies from one supplier exceed, or are expected to exceed, AED 375,000 within 12 months, two further duties follow: a written bank confirmation that the supplier holds an account, and a review of publicly available information about its standing.

Supply Checks Required Under Article 4

Knowing the supplier is half the picture; Article 4 asks a second question of each taxable supply: does the transaction itself make commercial sense? The conditions cover:

• A genuine commercial rationale for the transaction and the supplier’s role in it.
• Commercially justifiable payment terms, with documented reasons for third-party payments or payments routed outside the supplier’s home country.
• Electronic payment wherever possible; cash needs a clear commercial reason within legal limits.
• Prices and margins that are not unexplainably out of line with the market.
• Goods or services within the supplier’s licensed activity.
• Verifiable origin and ownership of the goods received.
• A clear commercial reason for any intermediary in the chain.

These flags tend to travel together. Take a Dubai Mainland trader offered branded electronics at a steep discount: the deal arrives through a new intermediary, and payment is requested to an overseas third-party account. That is three flags at once, and each needs a documented answer before the input tax is claimed.

The Three Monetary Thresholds That Set Your Workload

The Decision does not demand equal effort for every purchase; three figures set the scale:

• AED 10,000 per supply, excluding VAT. Below this value, the verification measures may be skipped.
• AED 100,000 per supplier over 12 months. Once total supplies from one supplier cross this level, past or expected, the AED 10,000 exception falls away and every supply from that supplier needs full verification.
• AED 375,000 per supplier over 12 months. Above this level, the enhanced supplier checks described under Article 3 also apply.

The middle figure is the one that surprises people. A Business Bay SME pays its facilities contractor AED 9,500 a month, so no single invoice crosses AED 10,000. Over a year, though, the total reaches AED 114,000 and clears the AED 100,000 line, so every one of those small invoices now needs full checks. So supplier spend should be mapped against the thresholds before the next VAT return filing in UAE cycle; the linked page covers support for exactly this step.

Records and the Written Policy Under Article 5

Performing the checks is half the duty; Article 5 requires proof:

• Verify each supplier at first dealing, and again once 12 months have passed since the last check.
• Verify every taxable supply received against the Article 4 conditions.
• Retain records showing how each verification step was performed, in a form the Authority can review.
• Maintain a written policy naming the people who implement, review and supervise the process.

The named-owner point matters most, because the FTA expects a defined process with accountable people and files that hold up during an FTA tax audit in the UAE; the linked guide walks through one. The same file also strengthens related party records, so many finance teams run this alongside their corporate tax services in UAE engagement.

What Happens If You Claim Without Verification

The Decision carries no standalone fine, so skipping the checks costs nothing on paper; the real exposure sits in the deduction itself. Once the Authority links a supply to an evasion chain, a business without verification records falls into the third situation described earlier, and the input tax can be denied.

A denied deduction creates a tax difference, potential administrative penalties and a months-long dispute. Businesses can contest FTA decisions through VAT reconsideration services; the linked page sets out that route, though a complete supplier file costs far less than fighting one.

Quick-Reference Checklist Before the 28 October 2026 Return

1. Pull 12 months of purchase data by supplier and flag everyone above AED 100,000 and AED 375,000.
2. Collect or refresh Emirates ID, passport or incorporation documents for flagged suppliers.
3. Confirm each flagged supplier’s place of business matches its invoiced activity.
4. Screen the two stability indicators and record explanations for any red flags.
5. Obtain written bank confirmations for suppliers above AED 375,000.
6. Move remaining cash payments to electronic transfers, or document the reason where cash continues.
7. Adopt a written verification policy with named owners.
8. Store all verification evidence centrally so it can be produced on request.

Build Your Verification File With Specialist Support

FTA Decision No. 13 of 2026 turns supplier due diligence into a condition of input tax recovery across the UAE, yet it is manageable once a policy owner is named. Asad Abbas & Co. Chartered Accountants LLC assists businesses across Dubai, Abu Dhabi, Mainland and Freezone jurisdictions, bringing 10+ years of UAE accounting expertise, 40+ qualified professionals holding CPA, CGMA, CFM, MBA and CMA credentials, 1000+ audits completed and 5000+ clients served. As an FTA Approved Tax Agent, a RERA Registered Auditor and a Freezone Listed Auditor, the team can map your suppliers against the thresholds, draft the Article 5 policy and review past claims through its dedicated VAT consultancy services in Dubai practice.

A supplier file review is a natural first step; call +971 52 647 4994 or email info@abbasaccounting.com to reach the Business Bay office in Dubai or the Abu Dhabi offices.

Frequently Asked Questions

What is FTA Decision No. 13 of 2026?

FTA Decision No. 13 of 2026 is a Federal Tax Authority decision, issued on 22 July 2026, setting out the measures, procedures and conditions UAE businesses must follow to verify suppliers and supplies before deducting input VAT. It gives practical effect to Article 54 bis of the VAT Law, introduced by Federal Decree-Law No. 16 of 2025. It covers supplier identity checks, place of business confirmation, risk screening, supply integrity tests, monetary thresholds and record keeping for VAT registered businesses across the UAE.

When does FTA Decision No. 13 of 2026 come into effect?

The Decision took effect on 1 October 2026, as stated in Article 7. It was approved by the FTA Board of Directors on 23 June 2026 and formally issued on 22 July 2026. The first affected cycle for monthly filers is the VAT return due on 28 October 2026. Businesses in Dubai, Abu Dhabi and every other emirate should treat input tax claimed from 1 October 2026 onward as subject to the verification measures and complete supplier checks before filing.

Do I need to verify every supplier invoice before claiming input VAT in the UAE?

No, not every invoice. Supplies valued below AED 10,000 excluding VAT are generally outside the verification measures. That relief disappears once total supplies from a single supplier exceed AED 100,000 over 12 months, measured on past or expected values. Every supply from that supplier then requires full verification, however small the invoice. Above AED 375,000 from one supplier in 12 months, a written bank confirmation and a review of publicly available information about the supplier are also required under Article 3.

How often do suppliers need to be re-verified under the new UAE VAT rules?

Suppliers must be re-verified once 12 months have passed since the last verification, even in a continuous business relationship. Article 5 of the Decision requires businesses to verify each supplier at first dealing and to repeat the exercise on that annual cycle. In practice, finance teams should record a verification date against every active supplier and keep a rolling review calendar. A supplier verified in October 2026 therefore needs a refreshed check by October 2027 before further input tax is claimed on its invoices.

What happens if a business claims input VAT without completing verification?

The Decision imposes no direct fine of its own, but the consequences sit in the claim. If the Federal Tax Authority finds a supply formed part of a chain connected to tax evasion, a business that skipped the prescribed checks is treated as having been required to know about it under Article 54 bis. The Authority can then deny the input tax deduction, creating a tax difference and potential administrative penalties, so documented verification is the strongest defence for a business acting in good faith.

Do Freezone and designated zone companies need to follow FTA Decision No. 13 of 2026?

Yes. The Decision applies to every taxable person under the UAE VAT Law, and VAT registered Freezone and designated zone companies are taxable persons. A distributor in a designated zone may treat certain goods movements as outside the scope of VAT, yet it still recovers input tax on rent, services and Mainland purchases. All of those deductions fall under the verification measures. The same position applies to an advisory firm based in ADGM in Abu Dhabi and to Mainland businesses throughout the Emirates.

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