FTA Decision No. 13 of 2026 Now in Force: Supplier Checks Required Before Claiming Input VAT
FTA Decision No. 13 of 2026 took effect on 1 October 2026. VAT-registered businesses in the UAE must now verify their suppliers and every supply they receive, and keep evidence of those checks, before deducting input VAT. A valid tax invoice alone may no longer be enough to protect the right to recover.
Why FTA Decision No. 13 of 2026 matters
The Decision sets out the checks behind Article 54(bis) of the VAT Law, in force since 1 January 2026. Under that article, the Federal Tax Authority must refuse input VAT linked to tax evasion where the business knew of the link, and may refuse it where the business should have known. Skipping the prescribed checks can be enough to put a business in the second category.
Checks on the supplier
Suppliers need checking at the start of the relationship and again whenever 12 months pass without a check:
- Identity: ID and a meeting, in person or online, for individuals; incorporation records and the authorised representative’s ID for companies.
- Premises: confirmation, electronically or by a site visit, that the supplier operates from genuine premises suited to its business.
- Warning signs: such as repeated changes of address or key staff, or deals out of line with the supplier’s size. Each one needs a documented explanation.
- Larger suppliers: where purchases from one supplier pass, or are expected to pass, AED 375,000 in 12 months, a letter from a UAE bank confirming the supplier has an account, plus a check of credible public sources and media.
Checks on each supply
Every taxable supply received also needs checking for a genuine commercial purpose, pricing that is not far from market levels without a clear reason, and goods or services within the supplier’s licensed activity. Payment should be electronic. Cash needs a documented business reason and must stay within legal limits, and payments routed to third parties, or to accounts outside the country where the supplier is incorporated, need a reasonable explanation.
Each step must be recorded, and businesses need a written policy that sets out who runs the checks, who reviews them and who oversees the process. Purchases under AED 10,000 excluding VAT can be left out, unless the supplier’s total over the previous or coming 12 months is above AED 100,000.
What to do now
- Review high-value and higher-risk suppliers first.
- Build the checks into supplier onboarding and accounts payable, and track spend per supplier against the AED 10,000, AED 100,000 and AED 375,000 thresholds.
- Issue the written policy and assign owners in finance and procurement.
- Review supplier files behind input VAT claimed since 1 January 2026, when the FTA’s power to refuse “should have known” claims began.
How strictly the FTA will apply the checks in audits is not yet clear, so consistent, documented processes are the safest position.
How nAlyze helps
nAlyze reviews your supplier base and input VAT position against FTA Decision No. 13 of 2026, helps build the required checks into onboarding and accounts payable, and trains finance and procurement staff to apply them. Explore our VAT services or see if you’re a fit.
