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FTA DECISION NO. 13 OF 2026 | VERIFICATION OF SUPPLIES

Verification of the Validity and Integrity of Supplies Before Deduction of Input Tax

Verification of supplies | Issued 22 July 2026 | In force from 1 October 2026

Verification of supplies before deduction of input tax is the subject of FTA Decision No. 13 of 2026 and of the Federal Tax Authority (FTA) clarification titled Verification of the Validity and Integrity of the Supplies before Deduction of Input Tax. From 1 October 2026, how well you check your suppliers and supplies can decide whether your input tax (input VAT) claim stands if the FTA finds tax evasion in a supply chain.

This guide explains the checks for verification of supplies, the thresholds, and the records to keep.

FTA Decision No. 13 of 2026 at a glance

Issued: 22 July 2026
In force from: 1 October 2026
Applies when: the FTA establishes that Tax Evasion occurred in a supply or chain of supplies
Legal basis: Article 54(bis)(2) of the VAT Law (Federal Decree-Law No. 8 of 2017)
FTA guidance: VAT Public Clarification on the verification of supplies

1. Summary: Verification of Supplies Under FTA Decision No. 13 of 2026

Under Article 54(bis)(2) of the VAT Law, the FTA may reject the deduction of recoverable input tax if the supply was part of a supply or a chain of supplies related to Tax Evasion, and the business should have been aware of that connection.

FTA Decision No. 13 of 2026 explains how a business can show it was not aware, and could not be expected to have been aware. It does this through a set of verification measures, procedures and conditions. Three points from the FTA's clarification matter most:

It only applies where Tax Evasion is established. The burden of proving Tax Evasion falls on the FTA (Article 51 of the Tax Procedures Law).
The checks are not mandatory for every supply. But following them as part of your normal process gives you documentary evidence that you did not know.
Compliance protects you. If Tax Evasion occurred, you were not actually aware of it, and you can prove you followed the Decision, you will not be treated as someone who "should have been aware". Normal input tax recovery rules then apply.

How can we help you?

Get in touch with Hussain Al Shemsi Chartered Accountants for expert auditing, accounting, tax, and advisory services in the UAE.

2. Verification of the Supplier

You must verify a supplier the first time you deal with them, and again if a regular supplier has not been verified in the previous 12 months. There are four parts.

Identity: natural person

For an individual supplier:

Get a copy of a valid Emirates ID or passport.
Meet the supplier in person, or by phone or video call, before they make the supply.

Identity: legal person

For a company supplier:

Verify its incorporation through an official database (for example the ADGM or DIFC registers) or get its certificate of incorporation or trade licence.
Details must be valid and match the entity's name, address and employees.
Get a copy of the Emirates ID or passport of the director, agent or employee who represents it.

Place of business

Confirm the supplier has a real place of business, using web mapping tools or a site visit. The location must make sense for the activity: a warehouse supplier should look like a warehouse supplier.

Risk level

Check that none of these risk indicators applies:

The supplier changed its address more than twice in the previous 12 months.
The supplier changed its key employees (managers or the people you deal with) more than twice in the previous 12 months.
Its transactions are disproportionate or unexpected in volume, value or nature compared with the size and history of its business.

If a risk indicator applies, keep a clear, justified explanation and give it to the FTA if asked, as long as it does not contradict other evidence you hold. Businesses that already follow KYC procedures under AML / CFT rules can often reuse some of the same documents: see AML / CFT Regulatory Compliance.

Additional verification: bank account and reviews

If you bought more than AED 375,000 from the same supplier in the previous 12 months, or expect to in the next 12 months, two more checks apply: (1) a written confirmation from a UAE bank that the supplier has a bank account, for example an IBAN letter, which need not be addressed to you and should carry no reservations or conditions; and (2) a review of publicly available reviews and media coverage from reliable sources, to confirm they fit the size and nature of the business and show no signs of suspected Tax Evasion.

3. Verification of Supplies (Taxable Supplies)

Beyond the supplier, you also check each Taxable Supply you receive or accept. There are three areas.

General assessment

Assess the conditions of the transaction and make sure the supplier's involvement rests on genuine commercial reasons.

Payment conditions

The payment method and terms must make commercial sense.
A third party in the payment, or a bank account outside the supplier's country of incorporation, needs a reasonable commercial explanation.
Pay by electronic means. Cash needs a documented commercial reason, must stay within the legal thresholds and be easy to verify. The cash thresholds will be set by a Minister of Finance decision.

Circumstances of the supply

Prices and margins should not be commercially unjustifiable or far from market levels without a clear reason.
The goods or services should fall within the supplier's usual activity and what its licence allows.
For goods, check they are authentic, where they came from, and that the supplier owns them or may sell them.
If the supplier is an intermediary, there should be a clear reason for its role.

4. Exception to the Verification of Supplies

You do not need to verify a supply if its value is below AED 10,000 (excluding VAT), unless your total purchases from that supplier exceed AED 100,000 (excluding VAT) in the previous 12 months or are expected to in the next 12 months.

Situation	What applies
Single supply under AED 10,000 (excl. VAT)	Supply checks not required
Total from the same supplier over AED 100,000 (excl. VAT), previous or next 12 months	Supply checks still required
Total from the same supplier over AED 375,000, previous or next 12 months	UAE bank confirmation and review of public reviews and media coverage
First dealing, or supplier not verified in the previous 12 months	Supplier verification required

5. Documentation and Policy for Verification of Supplies

Document every step. Keep the supporting documents and records so the FTA can check that you carried out each step correctly. Well-kept books make this easier: see our Accounting Services.
Keep a written policy. It must name the people responsible for carrying out, reviewing and supervising the checks and set out their powers and responsibilities. Keep it where you store your required documents.

6. Examples of Verification of Supplies from the FTA

The FTA illustrates the Decision with practical examples. In each "fails" case, if Tax Evasion is established, the business would be regarded as one that "should have been aware".

Fails
No supplier verification

A boutique hired a curtain specialist found through social media, dealt only over WhatsApp and never checked their identity.

Fails
Risk indicator ignored

A warehouse chose an ERP supplier that claimed 25 consultants and a four-week delivery, though its website showed three employees and mobile-app experience only.

Fails
Unexplained payments

A bakery received three invoices of AED 20,000 from different companies with different foreign bank accounts, and accepted "convenience" as the reason.

Fails
Price too good to be true

A hotel bought bed sheets at AED 200 a set when the market range was AED 400 to AED 800, and did not ask why.

Passes
Licence checked

A restaurant asked a new supplier for its trade licence, saw the licensed activities did not cover shishas, and decided not to buy.

Passes
Site and documents checked

A construction company visited a supplier's warehouse before buying machinery. A clinic collected serial numbers and customs documents and reviews supplier licences every year.

7. Practical Steps for Verification of Supplies

Add a supplier onboarding checklist: ID, incorporation or trade licence, place of business and risk indicators.

Re-verify active suppliers at least once every 12 months.

Flag suppliers above AED 100,000 and AED 375,000 a year and collect bank letters and reviews for them.

Pay suppliers electronically to the supplier's own account and keep an explanation on file for any exception. See Internal Audit.

Write the verification policy and name who is responsible. See Standard Operating Procedures (SOPs).

Keep every check on file in one place so you can answer an FTA request quickly.

Review your VAT return process before you deduct input tax on purchases from new or unusual suppliers.

8. Frequently Asked Questions

What is FTA Decision No. 13 of 2026?

It is the FTA decision that sets the measures, procedures and conditions a business should follow to verify the validity and integrity of supplies before deducting input tax. It was issued on 22 July 2026 and applies from 1 October 2026.

What is the FTA VAT Public Clarification on this topic?

It is the FTA’s guidance on how FTA Decision No. 13 of 2026 applies. It is titled “Verification of the Validity and Integrity of the Supplies before Deduction of Input Tax” and includes worked examples.

Is supplier verification mandatory for every purchase?

No. The checks are not required for all supplies. But following them gives you evidence that you were not aware of any Tax Evasion, which is relevant if the FTA rejects an input tax deduction.

Can the FTA reject my input tax deduction?

The FTA may reject a deduction of recoverable input tax if Tax Evasion is established and you should have been aware that the supply was part of a supply or chain of supplies related to it. The burden of proving Tax Evasion falls on the FTA.

How do I verify a supplier for VAT purposes in the UAE?

Check the supplier’s identity (Emirates ID or passport for individuals, incorporation details and a representative’s ID for companies), confirm its place of business, check the risk indicators, and keep records of each step. Our Internal Audit team can review your process.

How often should I verify a supplier?

When you first deal with them, and again if a regular supplier has not been verified in the previous 12 months.

Which suppliers need a UAE bank confirmation?

Suppliers you bought more than AED 375,000 from in the previous 12 months, or expect to in the next 12 months. The confirmation can be an IBAN letter and need not be addressed to you.

Can I pay a supplier in cash?

Payment should be by electronic means. Cash needs a documented commercial reason, must stay within the thresholds in the tax legislation and must be easy to verify. The thresholds will be set by a Minister of Finance decision.

What documents should I keep?

The supporting documents and records for each verification step, and a written policy naming the people responsible for carrying out, reviewing and supervising the checks. See Accounting Services for help with record keeping.

What counts as Tax Evasion under the VAT Law?

The VAT Law defines it as using illegal means to reduce the tax due, avoid paying it, or obtain a refund of tax you were not entitled to.

Need a Supplier Verification Process?

Our team can help you set up the checks, the policy and the records under FTA Decision No. 13 of 2026.

This article is general information based on FTA Decision No. 13 of 2026 and the FTA VAT Public Clarification on the verification of supplies before deduction of input tax. It is not tax advice for your specific situation.