The FTA has issued Decision No. 13 of 2026, and it changes what stands between a business and its input tax. From 1 October 2026, recovering input tax is no longer only a matter of holding a valid tax invoice. The buyer is now expected to have verified who the supplier is and whether the supply is genuine, and to be able to prove it. The Decision sits under Article 54(bis) of the VAT Law and places a real due diligence duty on the recipient of the supply.
Why this matters
Until now, input tax recovery rested largely on documentation from the seller. Decision No. 13 shifts part of the burden to the buyer. If a supplier turns out to be fictitious, fraudulent, or acting outside the bounds of its licence, the checks you did or did not do before deducting input tax now bear on whether that deduction holds. In plain terms it is a know your supplier obligation, backed by records the FTA can inspect.
Verifying the supplier
Article 3 sets out what to confirm about the supplier before you rely on it:
- Identity. For an individual, obtain valid identification (Emirates ID or passport) and meet them, in person or virtually, before the supply. For a company, confirm incorporation through official databases or the certificate of incorporation, and verify the identity of the person authorised to act for it.
- Place of business. Confirm the supplier has a real place of business, by appropriate electronic means or a field visit, and that it fits the activity they claim to carry out.
- Risk indicators. Check that none of three flags apply: the supplier changed its address more than twice in the past 12 months, changed its key people more than twice in the past 12 months, or ran transactions out of proportion to the size and history of its business. If a flag does apply, keep a clear written explanation and be ready to give it to the FTA.
- Bank account and reputation. Where supplies from that supplier exceed AED 375,000 over the past 12 months, or are expected to over the next 12, obtain written confirmation from an authorised UAE bank that the supplier holds an account, and review credible public reviews and media coverage for signs of trouble.
Verifying the supply
Article 4 asks you to look at the transaction itself, not only the counterparty:
- The supplier has a genuine commercial reason to be in the deal.
- The payment terms make commercial sense. Payment should be by electronic means, and cash needs a documented reason and must stay within the legal thresholds. A third party in the payment chain, or payment to a bank account outside the supplier's country of incorporation, needs a reasonable explanation.
- Prices and margins are not far from the market without a clear reason, the goods or services fall within the supplier's licensed activity, and the origin and ownership of goods can be verified. Where the supplier is an intermediary, its role needs a clear commercial rationale.
The thresholds that decide when it applies
The Decision is calibrated so the heaviest checks fall on larger relationships:
- Under AED 10,000 for a supply, excluding VAT, you may set the measures aside.
- That exemption falls away once total supplies from the supplier pass AED 100,000 over a 12 month period, or are expected to.
- Above AED 375,000 from a supplier over 12 months, the bank confirmation and reputation review are added on top.
So a small, occasional purchase can be taken at face value, but a recurring supplier relationship of any real size has to be verified.
What to put in place before 1 October
Article 5 makes clear this is a process, not a single gesture. You verify a supplier on the first dealing, and again on recurring dealings if you have not verified it in the past 12 months. Every taxable supply is assessed. Every step is documented and retained. And you must keep a written policy naming who runs, reviews and supervises the checks, with their powers and responsibilities set out.
For most groups the practical task is to build supplier verification into the accounts payable process before the effective date:
- Set the policy. Write down who verifies suppliers, at what value, and how the evidence is stored.
- Build the checklist. Identity, place of business, risk flags, and, above the thresholds, the bank confirmation and reputation review.
- Retain the trail. Keep the evidence with the transaction so a later FTA review can follow it.
Decision No. 13 does not change the rate of tax or what makes an invoice valid. It changes what you must have done before you rely on that invoice to recover tax. The businesses that treat supplier verification as a routine control, rather than a scramble after a query, are the ones whose input tax will hold.
This article is general commentary on FTA Decision No. 13 of 2026 and is not tax advice. We would be glad to help you build a supplier verification policy before it takes effect.