UAE businesses claiming input VAT must now look beyond tax invoices and supplier registration details. Under FTA Decision No. 13 of 2026, companies are required to verify their suppliers and the legitimacy of transactions before deducting input tax.
Effective October 1, 2026, the UAE VAT supplier verification rules introduce additional responsibilities for procurement, finance, and accounting teams. Understanding these requirements is essential for protecting VAT recovery claims and avoiding preventable compliance risks.
Key Takeaways:
- VAT supplier verification UAE requirements took effect on October 1, 2026.
- Businesses must verify supplier identities, business premises, commercial activities, and transactions.
- Transactions below AED 10,000 may qualify for an exception, subject to supplier-level thresholds.
- Supplier checks must be documented and repeated when required.
What Are the New VAT Supplier Verification Rules in the UAE?
The new requirements are established under FTA Decision No. 13 of 2026, which implements verification measures under Article 54(bis) of the UAE VAT Law.
Previously, businesses commonly focused on obtaining valid tax invoices and meeting existing input VAT recovery conditions. The new requirements introduce additional supplier due diligence and transaction verification measures.
The objective is to prevent input VAT deductions on supplies connected to tax evasion where businesses knew, or should reasonably have known, about that connection.
Who Must Comply With FTA Decision No. 13 of 2026?
The decision applies to taxable persons seeking to deduct input VAT on supplies received, subject to the prescribed exceptions.
This includes businesses across trading, professional services, construction, manufacturing, and other sectors.
Companies must incorporate verification into purchasing and accounting procedures rather than treating it as an exercise conducted only when preparing VAT returns.
What Businesses Must Verify About Their Suppliers
The supplier verification requirements cover several areas:
- Identity: Verify an individual supplier’s identity or a company’s legal incorporation and authorized representative.
- Business premises: Confirm that the supplier has an actual place of business appropriate for its activities.
- Commercial activities: Check whether the supplier’s activities are consistent with the goods or services provided.
- Risk indicators: Investigate frequent changes in addresses or key personnel, and unusual transaction patterns.
For individual suppliers, obtaining valid identification and meeting them in person or virtually before the supply are required verification measures.
How to Verify Transactions and Payments Before Claiming Input VAT
Supplier verification alone is insufficient. Businesses must also assess the legitimacy of each taxable supply covered by the decision.
Before claiming input VAT recovery, companies should verify that:
- The transaction has a genuine commercial purpose.
- Prices and profit margins are commercially reasonable.
- Payment arrangements are justifiable and traceable.
- Goods are authentic and the supplier has the right to provide them.
Electronic payments are required under the decision, with cash payments permitted only where the prescribed conditions are met.
Third-party payments or payments to foreign bank accounts also require reasonable commercial explanations.
Supplier Verification Thresholds and Exceptions
The decision introduces three important thresholds.
| Threshold | Requirement |
| Below AED 10,000 | Verification measures may be disregarded for an individual taxable supply, subject to conditions. |
| Above AED 100,000 | The small-value exception is unavailable when supplies from the same supplier exceed this amount over the relevant 12-month period. |
| Above AED 375,000 | Additional verification includes written bank confirmation and assessments of available recommendations, reviews, and media coverage. |
The AED 100,000 and AED 375,000 thresholds consider supplies over the previous 12 months or expected supplies over the next 12 months.
The AED 10,000 threshold excludes VAT.
How Often Should Businesses Reverify Suppliers?
Businesses must verify new suppliers and repeat verification for recurring suppliers when no verification has been completed during the preceding 12 months.
However, each taxable supply must be assessed separately where the requirements apply.
Maintaining a centralized supplier register can help finance teams monitor verification dates, outstanding documents, and upcoming reviews.
Documents and Records Businesses Must Maintain
Businesses must document their verification procedures and retain supporting evidence.
A practical record should include supplier identity documents, incorporation details, premises verification, transaction assessments, payment evidence, and explanations of identified risks.
The decision also requires a documented internal policy identifying who implements, reviews, and supervises verification procedures.
VAT Supplier Verification Checklist for UAE Businesses
Use this checklist to strengthen your verification process:
- Review suppliers and identify applicable verification thresholds.
- Obtain and validate required identity and incorporation documents.
- Check premises, business activities, and risk indicators.
- Verify transactions and payment arrangements.
- Retain supporting evidence and document exceptions.
- Assign responsibilities and monitor reverification dates.
These controls should form part of routine procurement and accounts payable processes.
How Creative Zone Tax & Accounting Can Help
Meeting the new requirements calls for reliable records, clear internal responsibilities, and consistent VAT reviews.
As an FTA-Approved Tax Agency, Creative Zone Tax & Accounting (CZTA) supports UAE businesses with VAT compliance, filing, accounting, and regulatory obligations.
Our experts can help assess compliance gaps, strengthen supporting documentation, and improve VAT reporting processes.
Contact CZTA to discuss your VAT compliance requirements and arrange a consultation.
Frequently Asked Questions:
The rules under FTA Decision No. 13 of 2026 took effect on October 1, 2026. They establish verification procedures for suppliers and taxable transactions before input VAT deductions. Businesses should incorporate these requirements into their existing procurement and accounting controls. CZTA’s VAT compliance services can help businesses review their current procedures.
No, verifying a supplier’s Tax Registration Number (TRN) alone does not satisfy the new requirements. Businesses must also verify prescribed identity, incorporation, business premises, and transaction details. Additional checks apply depending on supplier risk and transaction values. Proper documentation is essential for demonstrating compliance.
Certain taxable supplies below AED 10,000, excluding VAT, may qualify for an exception. However, this exception does not apply when supplies from the same supplier exceed AED 100,000 over the previous 12 months or are expected to exceed that amount over the next 12 months. Businesses must therefore monitor cumulative supplier spending rather than individual invoices alone. Accurate records maintained through accounting and bookkeeping services can support this monitoring.
Yes, existing suppliers are subject to the verification requirements. For recurring relationships, verification must be repeated when the supplier has not been verified during the previous 12 months. Businesses should therefore review their current supplier records and identify missing information. Maintaining updated supplier files supports ongoing compliance.
Failure to complete the required verification procedures may affect a business’s entitlement to recover input VAT. Under Article 54(bis), input tax recovery can be denied where supplies are connected to tax evasion and the relevant knowledge conditions are met. Incomplete verification can also make it difficult to demonstrate that appropriate checks were performed. Businesses should review their processes and seek professional guidance where necessary.
