FTA Decision No. 13 of 2026: verify suppliers and supplies before deducting input tax

What the Decision does

From 1 October 2026, a valid tax invoice is no longer enough to protect input tax. A business must also show that it checked who it bought from and what it bought, and it must have kept the evidence.

The Decision applies to every Taxable Person, meaning anyone registered or required to register for VAT, and covers supplies received, before the input tax on them is deducted (Articles 1 and 2). It is built in four parts: supplier checks (Article 3), supply checks (Article 4), procedures, documentation and policy (Article 5), and the AED 10,000 exception (Article 6).

How it works with Article 54(bis). Article 54(bis) of the VAT Law, in force since 1 January 2026, lets the FTA reject input tax where the supply sits in a chain linked to Tax Evasion and the recipient knew, or should have known, of the link. The Decision defines what "should have known" looks like in practice. A business that ran and documented these checks has a defence. A business that did not will find that defence very hard to make.

The thresholds that matter

Threshold	Test	Effect	Article
Below AED 10,000 per supply	Consideration excluding VAT, tested supply by supply	All checks may be disregarded for that supply	6(1)
Above AED 100,000 per supplier	Total supplies from that supplier in the previous 12 months, or expected in the next 12	The AED 10,000 exception is lost for that supplier, so every supply is checked	6(2)
Above AED 375,000 per supplier	Same 12-month look-back or look-forward	Enhanced check A5: bank confirmation, public reviews and media, client recommendations where available	3(4)
12 months	Since the supplier was last verified	Pillar A must be repeated	5(1)
More than 2 changes	Of address, or of key employees, in the previous 12 months	Risk indicator: keep a justified explanation	3(3)

Pillar A: verifying the supplier (Article 3)

Done the first time you deal with a supplier, and again whenever that supplier has not been verified in the previous 12 months (Article 5(1)). The "Evidence to keep" column is our recommendation on how to prove each check was done.

#	Check	What the Decision requires	Evidence to keep
A1	Identity of the supplier (3(1))	Individual: copy of a valid Emirates ID or passport, and a meeting, in person or virtual, before the supply. Company: incorporation verified through official databases or a certificate of incorporation, with details that match the entity's name, address, employees and other information.	ID copy and meeting note. Registry extract or certificate, trade licence, TRN check, and a note confirming the details match.
A2	Authorised representative (3(1)(b)(2))	Companies only: valid ID of the director, agent or employee authorised to represent the supplier.	ID copy plus the document showing authority: power of attorney, board resolution or licence listing.
A3	Address and place of business (3(2))	Verify an actual place of business, electronically or by a field visit, and confirm the premises suit the activity.	Visit report with photos, or dated electronic evidence such as maps or Ejari, and a note on why the premises fit.
A4	Supplier risk level (3(3))	Confirm that none applies: more than 2 address changes, or more than 2 key-employee changes, in 12 months; transactions disproportionate to the supplier's size and history. If one applies, keep a justified explanation for the FTA.	A signed-off risk questionnaire per supplier, and a written rationale for any indicator triggered.
A5	Bank account and public reputation (3(4))	Above AED 375,000: written confirmation from a UAE bank that the supplier holds an account, with no reservations; review of public reviews and media for signs of suspected Tax Evasion.	Original bank letter. Dated adverse-media search with sources and result. Spend tracking against AED 375,000.

Pillar B: verifying each supply (Article 4)

Done for every Taxable Supply received or accepted (Article 5(2)), unless the Article 6 exception applies.

#	Check	What the Decision requires	Evidence to keep
B1	General assessment (4(1))	Assess the conditions of the transaction and confirm the supplier took part for genuine commercial reasons.	Purchase order or contract, approval trail, and the business reason for the purchase.
B2	Payment conditions (4(2))	Payment terms must be commercially justifiable. A third-party payer or payee, or a bank account outside the supplier's country of incorporation, needs a reasonable explanation. Payment by electronic means; cash only with a documented reason, within legal limits, and easy to verify.	Payment record matched to the supplier's verified bank details. Written explanation for any third-party or foreign-account payment. Cash log with reasons.
B3	Circumstances of the supply (4(3))	Prices and margins in line with the market unless clearly explained; goods or services within the supplier's licensed activity; for goods, authenticity, origin and the supplier's right to sell; for intermediaries, a clear reason for their role.	Quotes or a price benchmark. Licence activity cross-check. Certificates of origin, delivery notes, customs and title documents. Note on the intermediary's role.

Document the checks and govern them (Article 5)

Article 5 turns the checks into a recordable process. A check you cannot evidence counts the same as a check you never did.

• 5(1) A supplier master file with a "last verified" date and an automatic 12-month re-verification flag.
• 5(2) Supply-level checks built into the purchase-order, goods-receipt and invoice-approval steps, not done afterwards.
• 5(3) A dated, retrievable record for each supplier and each supply, linked to the input tax claimed.
• 5(4) A board- or management-approved policy naming who implements, reviews and supervises each step (procurement, AP, finance, tax), kept with the tax records.

Timing. The Decision says the checks come before input tax is deducted. In our view, each check should be completed and evidenced before the VAT return claiming that input tax is filed, and ideally the supplier checks are done before the first order is placed.