FTA Supplier Verification in the UAE: How to Protect Your Input VAT Under Decision No. 13 of 2026

Since 1 October 2026, holding a valid tax invoice is no longer enough to recover input VAT safely. FTA supplier verification in the UAE is now a formal, documented process: FTA Decision No. 13 of 2026 sets out the checks a taxable person must carry out on its suppliers and on each supply before deducting input tax. Skip them, and the law treats you as someone who "should have known" about any tax evasion further up the chain, which gives the Federal Tax Authority (FTA) grounds to reject your claim.

This article explains the legal basis, every check the Decision requires, the AED thresholds, and a practical supplier-onboarding checklist your finance and procurement teams can adopt. It is as at November 2026.

The legal basis: Article 54 bis of the VAT Law

Federal Decree-Law No. 16 of 2025 inserted a new Article 54 bis into the UAE VAT Law (Federal Decree-Law No. 8 of 2017), effective 1 January 2026. It has three parts:

1. The FTA shall reject input tax if the supply was part of a chain connected with tax evasion and the taxable person knew of that connection when claiming.
2. The FTA may reject input tax if, given the circumstances of the supply, the taxable person should have known of the connection.
3. A taxable person is deemed to have been required to know where it failed to verify the validity and integrity of the supplies received, in line with measures set by the FTA.

FTA Decision No. 13 of 2026, issued on 22 July 2026 and effective from 1 October 2026, is the instrument that defines those measures. In plain terms, it turns the "should have known" test into a checklist. If you follow and document it, you have a defensible position. If you do not, you are exposed even if you were genuinely unaware of any fraud.

Who FTA supplier verification applies to

The Decision applies to every "Taxable Person", meaning any person registered or obliged to register for VAT, in relation to the supplies it receives before deducting input tax. It is not limited to large businesses or to particular sectors. A trading company, a contractor and a services firm are all covered.

Step 1: Verify the supplier (Article 3)

Identity

• Individual supplier: obtain a copy of valid proof of identity (Emirates ID or passport) and meet the supplier, in person or virtually, before the supply is made.
• Company supplier: verify incorporation through official databases or obtain the certificate of incorporation, and check that the details match the supplier's name, address and other information. Also verify the identity of the director, agent or employee authorised to represent the supplier, with a copy of valid ID.

Place of business

Confirm that the supplier has an actual place of business, either electronically or by a site visit, and that the premises are consistent with the activities it carries out. A "warehouse" supplier operating from a small shared desk should prompt questions.

Risk indicators

Check that none of these applies:

• the supplier changed its address more than twice in the previous 12 months;
• it changed key employees (managers or your contacts) more than twice in the previous 12 months;
• it has carried out transactions that are disproportionate or unexpected in volume, value or nature compared with its size and history.

If an indicator does apply, you must keep a clear, justified explanation and be ready to give it to the FTA on request.

Enhanced checks above AED 375,000

Where supplies from one supplier exceed, or are expected to exceed, AED 375,000 over 12 months, you must also:

• obtain a written confirmation from an authorised bank in the UAE that the supplier holds an account, without reservations or conditions (it does not need to be addressed to you); and
• review publicly available reviews and media coverage from reliable sources, checking they fit the supplier's size and activity and show no signs of suspected tax evasion.

Step 2: Verify each supply (Article 4)

Supplier checks are not enough on their own. Each taxable supply received must also be assessed:

• Commercial rationale: the supplier's involvement must rest on genuine commercial reasons.
• Payment terms: payment should be made electronically. Cash must have a documented commercial reason, stay within the limits in tax legislation and be easy to verify. Third-party payments, or payments to a bank account outside the supplier's country of incorporation, need a reasonable commercial explanation.
• Pricing: prices or margins should not be significantly out of line with market conditions without a clear reason.
• Licence scope: the goods or services must fall within the supplier's ordinary activity and its commercial licence.
• Goods: verify the authenticity and origin of goods and the supplier's ownership or right to sell them.
• Intermediaries: where the supplier acts as a middleman, there must be a clear commercial explanation for its role.

Step 3: Document it and assign ownership (Article 5)

The Decision requires you to:

1. verify a supplier when you first deal with it, and again if it has not been verified in the previous 12 months;
2. verify each taxable supply received;
3. document the steps taken and retain supporting records so the FTA can check them; and
4. keep a written policy naming who implements, reviews and supervises the procedures, with their powers and responsibilities, stored with your other required records.

The written policy is easy to overlook. A business with good informal habits but no documented policy does not meet Article 5.

The small-value exception (Article 6)

You may disregard the checks for taxable supplies under AED 10,000 (excluding VAT). The exception falls away where the total supplies from that supplier exceed AED 100,000 over the previous 12 months, or are expected to over the next 12 months.

This means you must track cumulative spend per supplier, not just invoice value.

A practical supplier-onboarding checklist

The list below follows the Decision, with one extra good-practice step marked as such.

1. Collect onboarding documents: trade licence or certificate of incorporation, ID of the authorised signatory, registered address.
2. Check incorporation details against an official database or the certificate, and confirm they match the invoice details.
3. Check the TRN (good practice, not listed in the Decision): the FTA website offers a free TRN/TIN verification tool. Confirm the 15-character TRN on the supplier's invoice is valid and matches the supplier's name.
4. Verify the place of business online or by visit, and note how you did it.
5. Screen the risk indicators (address changes, staff changes, unusual volumes) and record the outcome.
6. Forecast 12-month spend. If above AED 375,000, request the bank confirmation letter and run a media and review search.
7. Set a re-verification date no later than 12 months ahead in your vendor master.
8. Add a supply-level review to accounts payable: licence scope, pricing, payment route and goods origin before VAT is coded as recoverable.
9. Block non-standard payments (cash, third parties, overseas accounts) unless a documented reason is attached.
10. Approve and file the written verification policy, naming owners in procurement, accounts payable and tax.

If you use an ERP, many of these steps can sit in the vendor master and approval workflow. Our bookkeeping services in Dubai guide touches on FTA supplier checks; this checklist is the detailed version.

What to do about purchases already made since 1 October

Purchases received since 1 October 2026 will start flowing into VAT returns now. Before claiming input tax on them, review whether the supplier and supply checks were done and documented. Where they were not, complete and record the checks before you claim, and take advice on any supplier that raises risk indicators. The Decision requires records that let the FTA check your verification steps, so expect to produce them in any VAT audit.

Talk to GULF CONSULT

GULF CONSULT can review your supplier onboarding and accounts payable controls against FTA Decision No. 13 of 2026, draft the required verification policy and help you protect input VAT recovery. Book GULF CONSULT's free 30-minute consultation: email [email protected], call +971 58 600 4833, or message us on WhatsApp.