Effective Date: 1 October 2026

FTA Decision No. 13 of 2026 introduces supplier and supply verification requirements for taxable persons seeking to deduct input VAT in the United Arab Emirates (UAE). These requirements include verifying supplier identity and business premises, assessing transaction circumstances, documenting verification procedures and maintaining an internal verification policy.

The Decision establishes specific thresholds for additional verification and a limited exception for certain low-value supplies. Businesses should understand how these requirements affect procurement procedures, payment controls and input VAT recovery.

This guide explains the key requirements, the AED 10,000, AED 100,000 and AED 375,000 thresholds, and the practical steps businesses can take to organise their compliance procedures.

What Does FTA Decision No. 13 of 2026 Require?

FTA Decision No. 13 of 2026 sets out measures, procedures and conditions for verifying the validity and integrity of supplies before deducting input tax under the UAE VAT framework.

The Decision operates alongside Federal Decree-Law No. 8 of 2017 on Value Added Tax, as amended, particularly Article 54(bis).

Official sources:

• FTA Decision No. 13 of 2026 — official decision page and English translation
• UAE Federal Tax Authority — VAT Legislation

The FTA’s English version is an unofficial translation. Where interpretation is legally significant, the authoritative Arabic text should be consulted.

How FTA Decision No. 13 of 2026 Affects Input VAT Recovery

Input VAT is the VAT a business pays or owes on goods and services supplied to it, subject to the applicable recovery rules. Eligible businesses generally deduct recoverable input VAT through their VAT returns.

A valid tax invoice is important, but it may not be sufficient on its own where statutory rules concerning supplies connected to tax evasion apply.

Article 54(bis) of the UAE VAT Law addresses circumstances in which input tax deductions may be rejected where a supply or chain of supplies is connected to tax evasion and the applicable knowledge conditions are satisfied.

The legal consequences depend on the facts and statutory conditions. Not every purchase from a supplier subsequently implicated in tax evasion automatically results in the denial of input VAT recovery.

Businesses should maintain appropriate evidence of supplier checks, transaction assessments and decisions made during the verification process. For additional guidance, consult the UAE VAT legislation and relevant FTA publications.

Key Verification Thresholds Under FTA Decision No. 13 of 2026

These thresholds serve different purposes. The AED 10,000 threshold concerns an individual supply, the AED 100,000 threshold limits the low-value exception by reference to the supplier relationship, and the AED 375,000 threshold triggers additional supplier verification.

Businesses should monitor supplier totals across the relevant rolling 12-month periods and consider expected future supplies.

Important scope clarification: The AED 10,000 exception relates only to the verification measures specified in the Decision. It is not a general exemption from VAT, tax-invoice requirements, record-keeping obligations or other applicable input-tax recovery conditions.

Supplier Verification Requirements Under FTA Decision No. 13 of 2026

Article 3 sets out supplier verification requirements. These checks generally apply when dealing with a supplier for the first time, or when dealing with the supplier again if the supplier has not been verified during the preceding 12 months, subject to the applicable exception.

If the supplier is an individual

The taxable person must obtain a copy of valid proof of identity, such as an Emirates ID or passport. The taxable person must also meet the supplier in person or virtually before the supply is made.

If the supplier is a company or other legal person

The taxable person must verify the supplier’s incorporation through official databases or obtain a copy of its certificate of incorporation.

The identity of the director, agent or employee authorised to represent the supplier must also be verified using valid proof of identity.

Verify the supplier’s address and place of business

The Decision requires the taxable person to verify that the supplier has an actual place of business. This may be done using appropriate electronic means or through a field visit.

The business premises should be compatible with the nature of the supplier’s activities. Material inconsistencies should be investigated and documented.

Assess Supplier Risk Indicators

The Decision identifies supplier-related indicators that must be considered as part of the verification process, including whether:

• The supplier changed its address more than twice during the preceding 12 months.
• The supplier changed key employees, such as managers or personnel with whom the taxable person deals, more than twice during the preceding 12 months.
• The supplier undertook transactions whose volume, value or nature was disproportionate or unexpected compared with the size and history of its business.

Where an indicator applies, the taxable person must retain a clear and justified explanation and provide it to the FTA if requested, subject to the conditions specified in the Decision.

A risk indicator should not be treated as conclusive proof of tax evasion. The business should investigate the circumstances, document the explanation and retain supporting evidence.

When Do the AED 375,000 Enhanced Verification Requirements Apply?

Where supplies received from a supplier exceed AED 375,000 during the preceding 12 months, or are expected to exceed AED 375,000 during the following 12 months, additional verification requirements apply.

Confirm that the supplier has a bank account

The taxable person must obtain written confirmation from a bank authorised in the UAE confirming that the supplier holds a bank account. The confirmation must meet the conditions specified in the Decision and must not contain relevant reservations or conditions.

Review client recommendations, public reviews and media coverage

The Decision requires review of client recommendations where available. It also requires the taxable person to review and assess publicly available reviews and media coverage relating to the supplier from reliable sources.

The assessment should consider whether the information is consistent with the nature and size of the supplier’s business and whether it indicates suspected tax evasion.

Businesses should focus on reliable, relevant information rather than treating isolated online comments as proof of misconduct.

Verify Each Supply Before Deducting Input VAT

Supplier onboarding is only one part of the required process. The Decision also addresses verification of the circumstances of each taxable supply received or accepted, subject to the applicable exception. The precise requirements should be read alongside the authoritative Arabic text.

Commercial purpose of the transaction

Assess whether the supplier’s involvement has a genuine commercial basis and whether the transaction makes sense in the context of the business and the parties’ roles.

Payment method and payment flow

Consider whether the payment method and conditions are commercially justifiable.

Where a third party participates in payment, or payment is made to a bank account outside the supplier’s country of incorporation, there should be a reasonable commercial explanation consistent with the available evidence.

The Decision addresses electronic payments as the default and requires a documented commercial reason for cash payments, compliance with applicable tax-law thresholds and ready verification of the payment.

Pricing and profit margins

Assess whether the price or profit margin is commercially justifiable. Significant differences from market conditions should have a clear, supportable explanation.

A price difference is not automatically evidence of wrongdoing. The objective is to identify circumstances requiring explanation and document the assessment.

Supplier’s licensed and ordinary business activities

Check whether the goods or services fall within the supplier’s ordinary activities and licensed business activities. Investigate and document circumstances where the supply appears unrelated to the supplier’s normal business.

Authenticity, origin and ownership of goods

For goods, verify their authenticity and origin, as well as the supplier’s ownership or right to dispose of them. The appropriate evidence may vary according to the goods and commercial arrangement.

Intermediaries

Where a supplier acts as an intermediary, verify that there is a clear and justifiable commercial explanation for its role in the supply process.

Document the Verification Process and Maintain a Written Policy

The Decision makes documentation and record retention part of the required procedures.

Businesses must document the verification steps taken and retain supporting documents and records so that the FTA can verify whether the requirements have been correctly implemented.

The Decision also requires a documented policy identifying:

• The people responsible for implementing verification procedures.
• The people responsible for reviewing and supervising those procedures.
• Their powers and responsibilities.
• The designated location where the required documents are kept.

A practical verification file may include supplier identity documents, incorporation evidence, representative identification, address verification, risk assessments, bank confirmation where applicable, relevant public-information reviews, purchase orders, contracts, invoices, delivery or service-acceptance evidence, payment records and internal approval records.

This list is a practical record-keeping aid rather than an exhaustive list of documents required for every transaction. The evidence should reflect the applicable legal requirements and the circumstances of the particular supply.

How Can Businesses Prepare for Compliance?

Businesses should review existing procedures and identify gaps rather than assuming that their current invoice approval process covers every requirement.

Step 1: Review supplier records. Identify suppliers whose identity, incorporation, representative or place of business has not been adequately verified.

Step 2: Monitor the thresholds. Track supplier totals over the preceding 12 months and expected purchases over the following 12 months. Flag suppliers approaching the AED 100,000 and AED 375,000 thresholds.

Step 3: Update purchase approval procedures. Incorporate the relevant supply checks into procurement and accounts-payable workflows.

Step 4: Create a documented policy. Assign responsibility for completing, reviewing and supervising the checks. Define how risk indicators and missing evidence are escalated.

Step 5: Store evidence consistently. Maintain retrievable records linking each supplier assessment and transaction review to its supporting documents.

Step 6: Review exceptions and unresolved concerns. Refer missing evidence or concerning transactions to the designated reviewer before deciding on the VAT treatment.

Step 7: Reassess the process periodically. Review the effectiveness of the policy, record quality and whether the procedures reflect changes in suppliers, transaction patterns and applicable law.

The best process is one that employees can apply consistently and that allows the business to explain what it checked, why it proceeded and what evidence supported the decision.

Practical Compliance Checklist for FTA Decision No. 13 of 2026

The following checklist is an internal control aid to help businesses organise supplier and transaction verification. It is not an exhaustive statement of the law, a legal or tax opinion, or a guarantee of input VAT recovery.

• Confirm supplier identity and incorporation, where applicable.
• Verify the authorised representative and place of business.
• Record the date of supplier verification and monitor when repeat verification may be required.
• Monitor supplier totals against the AED 100,000 and AED 375,000 thresholds.
• Obtain the required bank confirmation and complete additional checks when applicable.
• Assess the commercial purpose, payment arrangements, pricing and relevant goods or services for each taxable supply.
• Investigate and document applicable supplier risk indicators.
• Retain the supporting documents and written explanations required for the relevant checks.
• Maintain an internal policy that identifies the people responsible for implementation, review and supervision.
• Escalate unresolved concerns to the appropriate tax or legal adviser.

The checklist must be applied in accordance with the relevant provisions of Decision No. 13 of 2026, the UAE VAT Law and applicable FTA guidance. The precise legal requirements depend on the facts and circumstances of the supplier relationship and each supply.

Completing the checklist does not, by itself, establish entitlement to deduct input VAT or determine whether a supply is connected to tax evasion. Those questions must be assessed under the applicable law and available evidence.

Frequently Asked Questions About FTA Decision No. 13 of 2026

When did FTA Decision No. 13 of 2026 take effect?

The Decision took effect on 1 October 2026.

Does the Decision require verification of every supplier?

Supplier verification is required when dealing with a supplier for the first time and when dealing with the supplier again if verification has not taken place during the preceding 12 months, subject to the applicable exception. Verification of each taxable supply is a separate requirement.

What is the AED 10,000 exception?

A taxable person may disregard the prescribed verification measures for an individual taxable supply where its consideration, excluding VAT, is less than AED 10,000. The exception does not apply if the total value of supplies from the same supplier exceeded AED 100,000 in the preceding 12 months or is expected to exceed AED 100,000 in the following 12 months.

When is bank-account confirmation required?

Additional supplier checks apply where the value of supplies received from a supplier exceeded AED 375,000 in the preceding 12 months or is expected to exceed that amount in the following 12 months. The Decision requires written confirmation from a UAE-authorised bank that the supplier holds an account, subject to the specified conditions.

Is a valid tax invoice enough to recover input VAT?

A tax invoice does not replace the verification procedures prescribed by Decision No. 13 of 2026. Businesses must also satisfy the other applicable requirements for input VAT recovery.

What records should a business retain?

Businesses should retain evidence of supplier verification, transaction assessments, supporting documents, required explanations and the written policy assigning responsibility for implementation, review and supervision.

Does failing to complete a check automatically prove tax evasion?

No. A missed verification step is not, by itself, proof that tax evasion occurred. However, failure to follow the prescribed measures can be legally significant under Article 54(bis) where the statutory conditions concerning a supply connected to tax evasion are met.

Conclusion: Applying FTA Decision No. 13 of 2026 in Practice

FTA Decision No. 13 of 2026 makes documented supplier and transaction verification an important part of the UAE input VAT recovery process.

Businesses should understand the AED 10,000, AED 100,000 and AED 375,000 thresholds, verify suppliers when required, assess the circumstances of each supply and maintain a written policy supported by accessible records.

The practical priority is to make verification part of normal purchasing and payment controls rather than treating it as an exercise undertaken only when an audit or dispute arises.

Businesses that are uncertain how the Decision applies to their supplier relationships, payment arrangements or internal procedures should seek advice based on their specific circumstances and the applicable UAE VAT legislation.

Corporate Legal Compliance Support in Dubai

Businesses reviewing their supplier onboarding procedures may also need to examine internal policy drafting, commercial arrangements, contractual responsibilities and wider regulatory compliance.

Ahmad Abdulla Ahli Advocates & Legal Consultants provides corporate legal advisory services in Dubai, including support relating to corporate governance, regulatory interpretation and legal compliance reviews.

Contact the firm’s corporate legal advisory team to discuss the legal and governance aspects of your business’s compliance framework. Tax calculations, VAT return positions and specialist tax interpretations should be reviewed by an appropriately qualified UAE tax adviser.

Contact Ahmad Abdulla Ahli Advocates & Legal Consultants

Official Legal Sources

1. FTA Decision No. 13 of 2026 — official decision page and English translation
2. Federal Decree-Law No. 8 of 2017 on Value Added Tax
3. Federal Tax Authority — VAT Legislation and Clarifications

This article is for general informational purposes only and does not constitute legal or tax advice. The application of the law depends on the relevant facts and applicable legal requirements. The official Arabic legislation should be consulted where interpretation is material; the FTA’s English translation of Decision No. 13 of 2026 is unofficial.