FTA Decision No. 13 of 2026: UAE Input VAT Verification Requirements
The UAE Federal Tax Authority (FTA) has issued FTA Decision No. 13 of 2026 introducing specific measures, procedures and conditions for taxable persons to verify the validity and integrity of suppliers and supplies before deducting input VAT.
The Decision is part of the UAE's strengthened approach to preventing improper input tax recovery and addressing transactions connected with tax evasion. For businesses, the practical impact is significant: having a tax invoice alone should no longer be treated as the entire input VAT compliance process.
⚡ Key Action Required
Review your vendor onboarding, procurement, accounts payable and VAT-control procedures before 1 October 2026.
What Is FTA Decision No. 13 of 2026?
It is titled “Measures, Procedures and Conditions required by Taxable Persons for the Verification of the Validity and Integrity of Supplies before Deduction of Input Tax.”
The Decision establishes a verification framework that applies before a taxable person deducts input tax. It requires businesses to assess relevant information about the supplier and the underlying taxable supply, retain evidence of the verification performed and maintain an appropriate internal policy.
When Does It Come Into Effect?
Use the period before October to review existing supplier onboarding and VAT recovery controls rather than waiting until the effective date.
What Changes for Input VAT Recovery?
Supplier Verification
Verify relevant information concerning the supplier before deduction.
Supply Verification
Confirm the underlying transaction is commercially genuine and consistent with available evidence.
UAE VAT Supplier Verification Requirements
For an individual supplier, check relevant identification information.
For a legal entity, verify its incorporation or legal existence using official records and identify the authorised person.
Verify the supplier has an actual place of business and that the location is consistent with its activities. Depending on circumstances, electronic or physical verification may be used.
The supplier's activities should be considered against the goods/services being supplied. A transaction may warrant further review when the nature, volume or value appears inconsistent with the supplier's stated business.
- More than two changes of business address in the previous 12 months.
- More than two changes involving key employees in the previous 12 months.
- Transactions that appear disproportionate or unexpected compared with the supplier's size and history.
Treat this as a risk assessment, not an automatic conclusion of non-compliance.
Enhanced Verification Above AED 375,000
🚨 AED 375,000 Threshold
Where supplies from a supplier exceed, or are expected to exceed, AED 375,000 over a 12-month period, additional verification measures apply:
- Confirmation of the supplier's UAE bank account
- Review of publicly available information
- Consideration of business reputation
- Retention of evidence of checks performed
The AED 10,000 Verification Exception
A specific exception applies to certain taxable supplies where consideration excluding VAT is below AED 10,000 — but it is not a blanket exemption.
⚠ Important Limitation
If supplies from the same supplier exceed or are expected to exceed AED 100,000 during the relevant 12-month period, the exception is not available.
Three Key Thresholds to Monitor
| Threshold | Practical Significance |
|---|---|
| Below AED 10,000 | Certain verification measures may be disregarded, subject to the Decision. |
| Above AED 100,000 | The small-supply exception is no longer available for the supplier relationship. |
| Above AED 375,000 | Enhanced supplier verification measures apply. |
Monitor cumulative 12-month spend per supplier — not just individual invoices.
Why the AED 100,000 Supplier Threshold Matters
📊 Example: Cumulative Purchases
- Purchase 1: AED 7,500
- Purchase 2: AED 8,500
- Purchase 3: AED 12,000
- + multiple further purchases during the year…
Looking at each invoice independently may hide the true supplier relationship. Rolling 12-month monitoring is required.
Verification of the Underlying Taxable Supply
Commercial Purpose
Demonstrate a genuine commercial reason for the purchase.
Payment Arrangements
Terms and flows should be commercially reasonable. Cash, third‑party or cross‑border payments may need justification.
Pricing
Price should be commercially justifiable — unusually high prices need review.
Licensed Activities
Goods/services should match the supplier's licensed business activities.
Documentation Requirements
Verification should be documented and evidence retained for potential FTA review.
Written Internal VAT Verification Policy
The policy should clearly define the following responsibilities:
Who performs supplier verification
Who reviews higher‑risk suppliers
Who approves exceptions
Who monitors supplier thresholds
Who verifies transactions
What documents must be retained
How often supplier info is reviewed
How risk indicators are escalated
Who supervises the overall process
Vendor Onboarding Checklist Flow
Accounts Payable Workflow
Common VAT Compliance Problems to Check
- Incomplete supplier master data
- Outdated supplier licences
- Missing authorised‑representative information
- No formal supplier risk assessment
- No record of supplier verification
- No rolling 12‑month supplier spend monitoring
- Weak procurement approval controls
- Unexplained third‑party payments
- Missing purchase documentation
- Transactions inconsistent with supplier activities
- Poor evidence for goods or services received
- No written VAT verification policy
- Unclear responsibility between procurement, finance & tax teams
FTA Decision No. 13 Compliance Checklist
Supplier Verification
Supplier Threshold Monitoring
Supply Verification
Evidence & Governance
Final Takeaway
FTA Decision No. 13 of 2026 introduces a more structured approach to supplier and supply verification before input VAT deduction.
From 1 October 2026, UAE taxable persons need to pay closer attention to supplier identity, place of business, risk indicators, commercial purpose, payment arrangements, pricing, supplier activities and supporting evidence.
The key preparation step is not simply updating an invoice checklist — businesses should review the entire process from vendor onboarding to procurement, invoice approval, payment and input VAT deduction, and establish an evidence trail that can be maintained for FTA review.
