FTA Decision No. 13 of 2026: Strengthening Supplier Verification and Input VAT Recovery Controls in the UAE

Effective from 1 October 2026

The Federal Tax Authority (FTA) has introduced a significant new compliance requirement for UAE VAT-registered businesses through FTA Decision No. 13 of 2026, concerning the measures, procedures and conditions required for verifying the validity and integrity of supplies before deduction of input VAT.

The Decision was issued on 22 July 2026, published on 20 August 2026, and takes effect from 1 October 2026. It is now listed by the FTA as part of the UAE VAT legislation.

For businesses, the practical message is clear: input VAT recovery should no longer be viewed solely as an invoice-checking exercise.

Businesses will need appropriate procedures to verify suppliers, assess the underlying supplies, identify relevant risk indicators and retain evidence of the checks performed.

What Does FTA Decision No. 13 of 2026 Cover?

The Decision establishes measures that taxable persons must apply when verifying the suppliers and supplies from which they seek to recover input VAT.

The requirements broadly fall into two areas:

• Supplier verification

• Supply and transaction verification

The Decision also introduces specific thresholds and documentation requirements.

1. Supplier Verification in the UAE

Businesses are required to verify the identity and existence of suppliers.

For a Natural-Person Supplier

The taxable person should:

1. Obtain valid identification, such as an Emirates ID or passport; and

2. Meet the supplier physically or virtually before the supply.

For a Legal-Entity Supplier

The taxable person should:

1. Verify the supplier’s incorporation through an official database or obtain valid incorporation documentation;

2. Ensure relevant incorporation information is consistent with the supplier’s identity and other available information; and

3. Verify the identity of the director, agent or employee authorized to represent the supplier.

Businesses must also verify the supplier’s actual place of business, either through appropriate electronic means or by conducting a field visit.

The business premises should also be compatible with the nature of the supplier’s activities.

2. Supplier Risk Indicators

The Decision identifies certain circumstances that should receive additional attention.

These include where:

1. The supplier has changed its address more than twice during the preceding 12 months;

2. Key employees or managers have changed more than twice during the preceding 12 months; or

3. Transactions are disproportionate or unexpected compared with the size and history of the supplier’s business.

The presence of a risk indicator does not by itself mean that the supplier should automatically be rejected.

However, where such an indicator exists, the taxable person should retain a clear and justified explanation, provided that the explanation is consistent with the evidence and information available.

This makes documentation particularly important.

3. Additional Requirements for Significant Suppliers

The Decision introduces an additional level of verification where supplies from a supplier:

Exceed AED 375,000, excluding VAT, during the preceding 12 months, or are expected to exceed AED 375,000 during the following 12 months.

In such circumstances, the taxable person must additionally:

1. Obtain written confirmation from an authorized bank in the UAE confirming that the supplier has a bank account; and

2. Review publicly available reviews and media coverage from reliable sources concerning the supplier.

The purpose is to provide additional assurance around the supplier’s existence, commercial activity and potential risk indicators.

4. Verification of the Actual Supply

Supplier verification process in the UAE is only one part of the new framework.

The taxable person must also assess the individual supply or transaction.

This includes considering whether:

Commercial Purpose

The supplier’s involvement and the transaction itself have a genuine commercial reason.

Payment Arrangements

The payment method and terms are commercially justifiable.

Particular attention is required where:

1. A third party makes or receives payment;

2. Payment is made to a bank account outside the supplier’s country of incorporation; or

3. Cash is used.

Where cash is used, the Decision requires a documented commercial reason, compliance with applicable thresholds and an arrangement that can be readily verified.

Pricing

Prices or profit margins should not be commercially unjustifiable or significantly different from market conditions without a clear reason.

Nature of Goods and Services

The goods or services should generally be consistent with the supplier’s ordinary business and licensed activities.

For goods, businesses should consider:

1. Authenticity;

2. Origin;

3. Ownership; and

4. The supplier’s right to dispose of the goods.

Where an intermediary is involved, the business should establish a clear and justifiable commercial reason for the intermediary’s involvement.

5. Important Thresholds

The Decision contains an important exception for smaller supplies.

Verification measures may be disregarded where the consideration for the taxable supply, excluding VAT, is less than AED 10,000.

However, this exception does not apply where the total value of supplies received from the same supplier:

1. Exceeded AED 100,000 during the preceding 12 months; or
2. Is expected to exceed AED 100,000 during the following 12 months.

Therefore, businesses should not simply configure their systems to treat every invoice below AED 10,000 as exempt from verification.

Supplier-level cumulative spend also needs to be monitored.

6. Documentation Is a Critical Requirement

The Decision requires taxable persons to:

1. Document the verification steps undertaken;
2. Retain supporting documents and records;
3. Maintain a documented verification policy; and
4. Identify the persons responsible for implementing, reviewing and supervising the verification procedures.

This means businesses should be able to demonstrate what was checked, when it was checked, who performed the check and what evidence supported the conclusion.

The control should therefore form part of the business’s procurement, accounts payable and VAT processes rather than being performed only at the time of preparing a VAT return.

7. What Should Businesses Do Before 1 October 2026?

Businesses should consider taking the following steps before the Decision becomes effective:

Review Existing Supplier Verification Procedures

Assess how suppliers are currently onboarded, verified and approved.

Review Major Suppliers

Identify suppliers with significant annual spend and those approaching the AED 100,000 and AED 375,000 thresholds.

Introduce Supplier Verification in Dubai and UAE

Establish a documented supplier verification checklist covering identity, incorporation, premises, representatives and risk indicators.

Introduce Supply Verification

Create a separate process for assessing commercial purpose, payment arrangements, pricing, supplier activity and other relevant transaction characteristics.

Establish Documentation Procedures

Create a central location for retaining verification evidence and explanations.

Allocate Responsibility

Clearly establish who is responsible for performing, reviewing and approving the checks.

Integrate the Process with VAT Controls

The process should connect procurement, accounts payable, finance and VAT compliance rather than operating as a standalone tax exercise.

How Can Bens Help?

At Bens Chartered Accountants, we are assisting UAE businesses in preparing for the new requirements through our:

Input Tax Recovery Controls & Supplier Verification Process Assessment and Implementation

Our support can include:

1. Reviewing existing supplier onboarding and procurement controls;

2. Assessing current input VAT recovery procedures;

3. Identifying supplier verification gaps;

4. Reviewing significant and higher-value suppliers;

5. Assessing the AED 100,000 and AED 375,000 thresholds;

6. Designing supplier verification procedures;

7. Designing supply-level verification procedures;

8. Preparing checklists and documentation templates;

9. Establishing responsibility and approval controls;

10. Developing or updating the client’s VAT control policy; and

11. Introducing periodic input VAT review procedures.

The objective is not to create unnecessary administrative burden. It is to establish a practical, proportionate and documented control framework that supports compliant input VAT recovery.

Is Your Business Ready for 1 October 2026?

If your business is VAT registered and regularly incurs significant input VAT, now is the appropriate time to review your supplier and input VAT control environment.

Contact Bens Chartered Accountants to arrange an Input Tax Recovery Controls and Supplier Verification Process Assessment.

Source: Federal Tax Authority Decision No. 13 of 2026. Businesses should refer to the latest FTA legislation and guidance when implementing the requirements.