Supplier Verification for VAT Recovery in the UAE: FTA Decision No. 13 of 2026

The UAE Federal Tax Authority (FTA) has published Decision No. 13 of 2026, which takes effect on 1 October 2026. The decision sets out how Article 54 bis of the VAT Law applies in practice: that article lets the FTA deny input VAT recovery where a supply is connected to tax evasion and the recipient knew, or should have known, about that connection. Until now it wasn't entirely clear what "should have known" means in practice; the new decision answers that with a specific set of mandatory checks.

What the FTA now requires

Holding a valid tax invoice is no longer enough on its own to secure input VAT recovery. The decision introduces a two-level verification system: checking the supplier, and checking the supply itself.

• supplier verification, done on the first transaction and then at least once every 12 months: confirming identity or incorporation documents, the supplier's actual place of business, and reviewing risk indicators such as frequent address or key-personnel changes;
• supply verification, done for every individual transaction: a genuine commercial reason for using this particular supplier, pricing in line with the market, goods or services matching the supplier's licensed activity, and clear title and origin for the goods;
• payment method: electronic payment is the default, and cash payments or payments through third parties need a documented explanation.

Value thresholds to know

The decision only exempts small, one-off supplies from verification, and that exemption is easy to lose.

Once supplies from a single supplier reach AED 375,000 over 12 months, enhanced due diligence kicks in: written confirmation of the supplier's bank account plus a reputation check (reviews, media mentions).

What to set up in your company

Article 5 of the decision requires taxable persons to have a written verification policy naming who is responsible, and to keep documentary evidence that the checks were actually carried out, in a form ready to show the FTA on request. The checks need to happen before input VAT is claimed; they can't be done after the fact.

What this means for your business

The decision doesn't introduce a fine as such. The consequence is more serious: denial of input VAT recovery on the specific transaction if the check wasn't done or wasn't documented, plus the risk of reassessment on audit. The recipient of the supply bears this even if it did nothing wrong itself, as long as the supplier, or someone further up the chain, was connected to tax evasion.

Businesses in the UAE have about a month left to: audit their suppliers and identify the ones crossing the AED 100,000 and AED 375,000 thresholds; gather the missing identity and address documentation; review how they handle cash payments; put a written verification policy in place with a named owner; and get accounting and procurement ready for the new process.

Where this information comes from

The decision is published on the official website of the UAE Federal Tax Authority (tax.gov.ae) under the title Decision No. 13 of 2026 on Measures, Procedures and Conditions Required by Taxable Persons for Verification of Validity and Integrity of Supplies. If you're not sure how the new rules apply to your suppliers, we can go over your situation on Telegram or WhatsApp.

Bottom line

FTA Decision No. 13 of 2026 changes the logic of input VAT in the UAE: instead of "you have an invoice, so you have recovery," businesses now need to prove upfront that the supplier and the transaction were verified. There's time before 1 October 2026 to put that process in place and avoid losing recovery on transactions the FTA considers risky.