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VAT

FTA Decision 13/2026: Input VAT Supplier Checks

غلاف مقال إقرار: التحقق من المورّد والتوريد قبل خصم ضريبة المدخلات

From 1 October 2026 (Article 7), FTA Decision No. 13 of 2026 sets out what a Taxable Person must do before deducting input tax: verify the supplier, verify the supply, document and retain those checks, and maintain a documented internal policy identifying who implements, reviews and supervises the procedures and their powers. Holding a valid tax invoice does not, on its own, cover these verification measures. The Decision applies for the purposes of Article 54 (bis) of the UAE VAT Law and contains a limited exception for lower-value supplies (Article 6). This guide does not replace the official text or tailored advice. For help with records and VAT return preparation within an agreed scope, see EQRAR’s VAT services.

Decision 13 in brief: scope and purpose

The instrument’s full title is Federal Tax Authority Decision No. 13 of 2026 on Measures, Procedures and Conditions required by Taxable Persons for the Verification of the Validity and Integrity of the Supplies before Deduction of Input Tax.

Article 2 sets the scope: the Decision applies for the purposes of Article 54 (bis) of the VAT Law and covers Taxable Persons verifying supplies before they deduct input tax. In practical terms, it answers three questions for any VAT-registered business:

  1. What do you need to check about the supplier?
  2. What do you need to check about the supply itself?
  3. How do you document those checks, and who in the business is responsible?

For owners, finance teams and accounts payable staff, the effect is simple: supplier and purchase files become part of the groundwork for recovering input VAT, not an afterthought.

A note on wording: the English text published by the FTA is an unofficial translation. Where this article follows its wording, the official Arabic text should be treated as the reference.

This article covers Decision No. 13 of 2026 only. The amendments to the VAT Executive Regulation and FTA Decision No. 17 of 2026 on employee expenses are separate topics with their own articles (see the comparison section below).

When does it apply?

Article 7 provides that the Decision takes effect on 1 October 2026.

Given its precise thresholds and 12-month periods, whoever handles input VAT in your business should read the full text on the FTA website and use this guide to organise the work.

Step one: checking the supplier (Article 3)

Article 3 sets out what supplier verification involves and adds an extra layer once supplies from a supplier pass a set threshold.

Identity

Verification starts with who the supplier is, distinguishing between a supplier who is a natural person and one that is a legal person. In practice, it helps to keep a record on each supplier file of what was checked and when.

Place of business

The supplier’s place of business also forms part of the check. Keeping the supplier’s current address on file, and updating it when it changes, is worthwhile, because address changes feature among the risk indicators below.

Article 3(2) also requires checking that the supplier’s place of business is compatible with the nature of the activities carried out.

Risk indicators that need an explanation

Article 3(3) lists risk indicators, which include:

  • the supplier’s address changing more than twice in 12 months;
  • the supplier’s key employees changing more than twice in 12 months;
  • transactions that are disproportionate or unexpected relative to the supplier’s size or history.

Where an indicator applies, there must be a documented, justified explanation. A dedicated field on the supplier file for that explanation saves time later and avoids relying on email threads or memory.

Above AED 375,000: bank account confirmation and public information

Under Article 3(4), where the value of supplies received from a supplier exceeds AED 375,000 in the previous 12 months, or is expected to exceed that amount in the next 12 months, supplier verification also includes: obtaining from the supplier a written confirmation issued by an authorised bank in the State that the supplier holds a bank account (with no relevant reservations or conditions; it need not be issued to the recipient of the supply); reviewing client recommendations where available; and reviewing and assessing publicly available reviews and media coverage from reliable sources about the supplier.

The test looks forward as well as back, so estimate expected volumes when onboarding a supplier or renewing a contract, not just at year end.

Step two: checking each supply (Article 4)

Article 4 turns from the supplier to the supply. The points to verify are:

  • Commercial reasons for the supply. Linking each purchase to a purchase order, contract or clear operational purpose makes this straightforward to evidence.
  • Payment conditions for the supply (Article 4(2)): payment methods and conditions must be commercially justifiable; where a third party is involved in paying or receiving payment, or payment is made to a bank account outside the supplier’s country of incorporation, there must be a reasonable commercial explanation consistent with the information available; Consideration should be paid by electronic means, and any cash payment must rest on a documented commercial reason, stay within the limits in applicable tax legislation, and be readily verifiable.
  • Price or margin compared with the market.
  • Whether the supply falls within the supplier’s ordinary or licensed activity.
  • Authenticity and ownership of the goods, where goods are involved.
  • An explanation of any intermediary’s role in the transaction.

Step three: procedures, records and a written policy (Article 5)

Article 5 deals with timing and record-keeping:

  1. Verify the supplier on first dealing, or if the supplier has not been verified in the previous 12 months.
  2. Verify each taxable supply against the points in Article 4.
  3. Document the verification steps and retain the records.
  4. Maintain a documented internal policy identifying the persons responsible for implementing, reviewing and supervising the verification procedures, and setting out their powers and responsibilities clearly; keep that policy with the required documents.

In other words, supplier checks should not rest on one person’s judgement; the documented policy makes roles and powers clear.

Thresholds at a glance (Articles 3(4) and 6)

Situation What the Decision provides Article
Consideration, exclusive of VAT, is less than AED 10,000 The Decision’s measures may be disregarded Art. 6
Total supplies from the same supplier exceed AED 100,000 in the previous 12 months, or are expected to exceed it in the next 12 months The AED 10,000 exception does not apply Art. 6
Value of supplies received from the supplier exceeds AED 375,000 in the previous 12 months, or is expected to exceed it in the next 12 months Added: written confirmation from an authorised bank in the State that the supplier holds a bank account; reviewing client recommendations where available; reviewing publicly available reviews and media coverage from reliable sources Art. 3(4)

Two points to keep in mind:

  • Article 6 is permissive: the measures may be disregarded below AED 10,000. It does not prohibit applying them.
  • The AED 100,000 test is based on total supplies from the same supplier, including what is expected over the next 12 months, so the value of a single invoice is not enough on its own.

Making it work in accounts payable and bookkeeping

The Decision sets out what must be verified; how you organise that internally depends on your size and systems. The practices below are suggestions to make the process manageable. They are not additional legal requirements beyond the Decision:

  • One file per supplier, holding the identity and place-of-business checks, the date of the last verification and any documented explanation for a risk indicator.
  • Rolling 12-month totals for each supplier, alongside an estimate for the next 12 months, so you can see when a relationship is approaching AED 100,000 or AED 375,000.
  • Each purchase invoice linked to proof of payment and to the notes on the supply, so the trail is easy to follow.
  • A named owner for applying and reviewing the internal policy, including who signs off on reliance on the low-value exception.
  • A periodic review of the supplier list to flag suppliers whose re-verification is coming up.

These practices sit naturally alongside bookkeeping, which includes tracking supplier balances and organising accounting files and supporting documents within an agreed scope. Reviewing purchase data, checking invoices and preparing VAT returns fall under EQRAR’s VAT services; tax work is not automatically included in a bookkeeping engagement, and the services included are set out in the proposal.

Decision 13 vs Decision 17 and the Executive Regulation amendments

  • Amendments to the VAT Executive Regulation (Cabinet Decision No. 149): a separate topic, covered in our article on the 2026 UAE VAT Executive Regulation amendments.
  • FTA Decision No. 17 of 2026: concerns recovering input VAT on employee expenses, explained in our article on input VAT on employee expenses.
  • FTA Decision No. 13 of 2026 (this article): verifying suppliers and supplies before input tax is deducted.

Frequently asked questions

What does FTA Decision No. 13 of 2026 require before you deduct input VAT?

For the purposes of Article 54 (bis) of the VAT Law, a Taxable Person must verify the supplier (identity, place of business and risk indicators) and the supply (commercial reasons, payment conditions, price, the supplier’s activity, the goods and any intermediary’s role). The checks must be documented and retained, and the business must maintain a documented internal policy identifying who implements, reviews and supervises the procedures and their powers, subject to the exception in Article 6.

When does FTA Decision No. 13 of 2026 take effect?

The Decision takes effect on 1 October 2026, under Article 7. It sets out the measures a Taxable Person takes to verify suppliers and supplies before deducting input tax, for the purposes of Article 54 (bis) of the VAT Law. For the full wording, refer to the text published on the Federal Tax Authority’s website rather than relying on summaries alone.

Is a valid tax invoice enough on its own to deduct input VAT after 1 October 2026?

Holding a valid tax invoice does not, on its own, cover the verification measures in FTA Decision No. 13 of 2026. From 1 October 2026 (Article 7), a Taxable Person must verify the supplier and the supply, document and retain those checks, and maintain a documented internal policy identifying who implements, reviews and supervises the procedures and their powers, before deducting input tax, subject to the exception in Article 6. Other conditions for deducting input tax under the VAT Law fall outside this article.

How often must a supplier be verified?

Under Article 5, a supplier is verified when you first deal with them, or if they have not been verified in the previous 12 months. The verification steps are documented and retained. In practice, recording the date of the last check on each supplier file makes it easy to see when the next one is due, rather than discovering the gap while preparing an input VAT claim.

Does every supply need to be verified separately?

Article 5 requires each taxable supply to be verified against the points in Article 4, such as commercial reasons, payment conditions, price and the supplier’s activity. Under Article 6, the measures may be disregarded where the Consideration, exclusive of VAT, is less than AED 10,000, unless total supplies from that supplier exceed AED 100,000 in the previous 12 months or are expected to exceed it in the next 12 months.

When can the Decision’s measures be disregarded?

Article 6 allows the measures to be disregarded where the Consideration, exclusive of VAT, is less than AED 10,000. The exception does not apply if total supplies from that supplier exceed AED 100,000 in the previous 12 months, or are expected to exceed that amount in the next 12 months. Tracking cumulative purchases per supplier is therefore essential before relying on the exception.

When is a supplier bank account confirmation required?

Under Article 3(4), where the value of supplies received from a supplier exceeds AED 375,000 in the previous 12 months, or is expected to exceed that amount in the next 12 months, supplier verification also includes obtaining written confirmation from an authorised bank in the State that the supplier holds a bank account, reviewing client recommendations where available, and reviewing publicly available reviews and media coverage from reliable sources. These steps form part of the documented verification records retained under Article 5.

Is Decision 13 the same as FTA Decision No. 17 on employee expenses?

No. FTA Decision No. 13 of 2026 deals with verifying suppliers and supplies before input tax is deducted, while FTA Decision No. 17 of 2026 concerns recovering input VAT on employee expenses, which we cover in a separate article. The amendments to the VAT Executive Regulation are also a separate topic, covered in another article on the EQRAR blog.

Next steps

From 1 October 2026, FTA Decision No. 13 of 2026 expects VAT-registered businesses to verify the supplier and each taxable supply before deducting input tax, to document and retain those checks, and to maintain a documented internal policy identifying who implements, reviews and supervises the procedures and their powers, subject to the threshold rules in Articles 3 and 6. A well-kept file for every supplier, with running totals of what you buy from them, is the most practical place to start.

If you would like a scoped review of how Decision 13 affects your supplier files and VAT return preparation, you can get in touch with EQRAR or message us on WhatsApp at +971 55 738 5159.

Sources

Further reading

This article is for general information. It does not replace the official text of the Decision or advice tailored to your business.

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