From 1 October 2026, VAT input tax verification in the UAE is a legal precondition for recovering the VAT you pay on purchases. Under Federal Tax Authority (FTA) Decision No. 13 of 2026, every taxable person must verify their suppliers and the supplies they receive before deducting Input Tax, or risk having that Input Tax claim rejected outright.
If your business claims Input Tax on goods or services from third-party suppliers, this decision directly affects how you onboard vendors, process invoices, and prepare VAT returns.
Who Does This Decision Apply To?
The decision applies to any Taxable Person under the VAT Law in respect of supplies received before deduction of Input Tax. The depth of verification required depends on three financial thresholds built into the decision:
- Below AED 10,000 (excluding VAT) per individual supply: the taxable person may disregard the verification measures, subject to the exception below.
- Above AED 10,000 per supply, or where cumulative supplies from one supplier exceed AED 100,000 over any rolling 12-month period: full supplier and supply verification under Articles 3 and 4 of the decision applies.
- Above AED 375,000 in supplies from a single supplier over 12 months (past or projected): additional checks apply, including a bank account confirmation and a review of publicly available information about the supplier.
Businesses most exposed include those in trading, general contracting, wholesale distribution, import-export, gold and precious metals, electronics, automotive parts, and any high-volume supply chain where suppliers change frequently.
Supplier Verification Requirements
When dealing with a supplier for the first time, or where a supplier has not been re-verified in the previous 12 months, a Taxable Person must:
Verify identity: For an individual supplier, obtain a valid proof of identity (Emirates ID or passport) and meet them, in person or virtually, before the supply is made. For a corporate supplier, verify incorporation through official databases or a certificate of incorporation, and verify the identity of the director, agent, or authorised representative.
Verify the place of business: Confirm the supplier has an actual place of business, consistent with the nature of their activities, using electronic checks or a field visit.
Assess supplier risk: Ensure none of the following red flags applies without a documented, justified explanation: the supplier has changed address more than twice in 12 months; changed key personnel more than twice in 12 months; or undertaken transactions that are disproportionate or unexpected for the size of their business.
Verify banking and reputation: (only where supplies exceed AED 375,000 over 12 months): obtain written bank confirmation that the supplier holds an account with a UAE-authorised bank, and review publicly available reviews or media coverage for indicators of suspected tax evasion.
Supply Verification Requirements
Beyond the supplier itself, each taxable supply received must be assessed for commercial substance:
- Conduct a general assessment confirming the transaction is based on genuine commercial reasons.
- Check that payment terms are commercially justifiable: third-party payments or payments to accounts outside the supplier’s country of incorporation need a documented explanation, and cash payments must be within legal thresholds and easily verifiable.
- Confirm prices and profit margins are not unjustifiably out of line with market conditions.
- Confirm the goods or services fall within the supplier’s licensed business activities.
- Verify the authenticity and origin of goods, and the supplier’s right to supply them.
- Where a supplier acts as an intermediary, document a clear commercial reason for their role.
Procedures, Documentation and Exceptions
Article 5 of the decision requires every business to document the verification steps taken, retain supporting records, and maintain a written policy naming the person responsible for implementing, reviewing and supervising these checks.
Under Article 6, the exception for supplies under AED 10,000 does not apply once the total value of supplies from that same supplier exceeds, or is expected to exceed, AED 100,000 within any 12 months, so businesses cannot rely on splitting invoices to avoid the requirement.
What Happens If You Don’t Comply?
Decision No. 13 of 2026 does not itself impose a separate fine. Instead, non-compliance exposes you to the underlying risk in Article 54(bis): if you cannot show you carried out the required verification, the FTA can treat you as having “known or should have known” that a supply was linked to tax evasion, and reject the related Input Tax deduction on audit. For businesses with large recoverable VAT balances, this can mean a genuine cash-flow loss on transactions that were, from your own perspective, entirely legitimate.
Due Diligence Checklist Before 1 October 2026
- Review and update your supplier onboarding procedure to capture ID, incorporation, and representative checks.
- Build a 12-month re-verification cycle into your vendor master data.
- Introduce a risk-scoring step for address changes, personnel changes, and unusual transaction volumes.
- Add bank confirmation and reputational screening for suppliers crossing the AED 375,000 threshold.
- Draft and formally approve a written verification policy naming a responsible owner.
- Train procurement and accounts payable staff on the new documentation standard before invoices are processed.
Frequently Asked Questions
Does every business need to verify every supplier?
No. The depth of verification scales with the AED 10,000, AED 100,000 and AED 375,000 thresholds in the decision, but any business claiming Input Tax on supplies from third parties above these limits is in scope.
Is a valid tax invoice still required?
Yes. A valid tax invoice remains a basic requirement for Input Tax recovery. Decision No. 13 of 2026 adds a layer of supplier and supply due diligence on top of it, it does not replace it.
How often must a supplier be re-verified?
At least once every 12 months, and again whenever dealing with that supplier for the first time.
Get Ahead of the 1 October 2026 Deadline with Tax Gian
Rebuilding supplier onboarding, risk-scoring and documentation from scratch under a tight deadline can be challenging for your finance team. Tax Gian’s UAE VAT advisory team can review your current supplier base, design a compliant verification policy, and put the documentation trail in place so your Input Tax claims are protected.
Contact Tax Gian today for a VAT input tax verification readiness review before the 1 October 2026 deadline, and make sure your Input Tax recovery is never put at risk by a supplier you didn’t fully vet.
