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Guides · 8 min · Updated 20 Oct 2026

FTA Decision 13: supplier checks before input VAT

From 1 October 2026, UAE businesses must check suppliers and supplies before deducting input VAT. The checks, the AED 10,000, 100,000 and 375,000 tests, an example.

The short answer

From 1 October 2026, a valid tax invoice is no longer the only thing standing behind an input VAT claim. FTA Decision No. 13 of 2026 lists checks a business must run on each supplier and each supply before it deducts the VAT. If you skip them and the supply later turns out to be part of a chain connected to tax evasion, the FTA can deny the input tax under Article 54(bis) of the VAT Decree-Law.

Small purchases are excused: a supply under AED 10,000 excluding VAT needs no checks, unless your total purchases from that supplier exceed AED 100,000 over the previous 12 months or are expected to over the next 12. Suppliers above AED 375,000 a year need two extra checks: a bank account confirmation and a review of public reviews and media coverage.

Where the rule comes from

Article 54(bis) was added to the VAT Decree-Law by Federal Decree-Law No. 16 of 2025. It lets the FTA refuse input tax on a supply connected to tax evasion where the buyer knew, or should have known, of the connection. Decision No. 13 of 2026, issued on 22 July 2026 and in force from 1 October 2026, is the FTA's list of what a careful buyer is expected to do. Advisers including EY read the two together: a buyer who did not carry out the checks will struggle to argue it could not have known.

The checks do not replace the invoice rules. You still need a valid tax invoice, and the cash payment block from Cabinet Decision No. 149 of 2026 still applies on top.

Checks on the supplier (Article 3)

Run these the first time you deal with a supplier, and again whenever you have not verified that supplier in the previous 12 months (Article 5(1)).

  • Identity, company supplier: confirm the incorporation through an official database or a copy of the certificate of incorporation, and check the name and address match. Take a copy of the Emirates ID or passport of the person who represents the supplier.
  • Identity, individual supplier: take a copy of a valid Emirates ID or passport, and meet the supplier, in person or by video call, before the supply.
  • Place of business: confirm the supplier has a real place of business, by electronic means or a site visit, and that it fits what the supplier says it does.
  • Risk indicators: note whether the supplier has changed its address more than twice, or its key people more than twice, in the last 12 months, or is trading in volumes or values out of line with its size and history. If any applies, write down a clear explanation and keep it for the FTA.
  • Above AED 375,000 a year (previous 12 months, or expected next 12): obtain a written confirmation from a UAE bank that the supplier holds an account, with no reservations, and review public reviews and media coverage for signs of evasion. The bank letter does not have to be addressed to you.

Checks on each supply (Article 4)

  • The transaction has a genuine commercial reason, and so does the supplier's part in it.
  • Payment is made by electronic means. Cash needs a documented commercial reason, must stay within the thresholds set in tax law and must be easy to verify. Paying a third party, or a bank account outside the supplier's country of incorporation, needs a reasonable commercial explanation.
  • The price or margin is not far from market without a clear reason.
  • The goods or services fall within the supplier's ordinary activity and its trade licence.
  • For goods, you have checked their authenticity and origin, and that the supplier owns them or may sell them.
  • Where the supplier is only an intermediary, its role has a clear commercial explanation.

What you must keep (Article 5)

Document every check and keep the supporting papers so the FTA can see what was done. You also need a written policy naming who runs, reviews and supervises the checks, and what each person is responsible for. A one-page policy, a supplier onboarding form and a per-supplier evidence folder cover most businesses.

Worked example: three suppliers

A trading company buys from three suppliers. Supplier A, a cleaning company, invoices AED 8,000 a month excluding VAT. Twelve months come to AED 96,000, which does not exceed AED 100,000, and each invoice is under AED 10,000, so the Article 6 exception applies and no checks are required. Keep the 12-month total on file in case the FTA asks how you reached that view.

Supplier B invoices AED 9,000 a month. Each invoice is still under AED 10,000, but 12 × 9,000 = AED 108,000, which exceeds AED 100,000. The exception falls away, so the supplier checks and the per-supply checks apply. Supplier B stays below AED 375,000, so no bank letter is needed.

Supplier C, a steel stockist, invoices AED 35,000 a month: 12 × 35,000 = AED 420,000 a year. Every check applies, including the UAE bank confirmation and the review of public coverage, because AED 420,000 exceeds AED 375,000.

Use the supplier verification checker to run the same tests on your own suppliers.

How Hysaab applies this

Hysaab's supplier portal collects the trade licence, tax certificate and bank letter when a supplier is onboarded, compares them with what the supplier typed and flags signs of tampering before an admin approves the supplier. Every invoice is then tested on arrival, including a supplier TRN that differs from the one seen on earlier invoices, so the evidence for a claim sits next to the claim.

Questions people actually ask

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

On 1 October 2026. It was issued on 22 July 2026 and applies to input tax deducted from that date, for the purposes of Article 54(bis) of the VAT Decree-Law.

Do I need to verify suppliers for small purchases?

Not where the supply is under AED 10,000 excluding VAT, unless your total purchases from that supplier exceed AED 100,000 over the previous 12 months or are expected to over the next 12. Above that total, every supply from that supplier is checked, whatever its size.

Is the AED 10,000 in Decision 13 the same as the simplified invoice limit?

No. Decision 13 uses supplies of less than AED 10,000 excluding VAT. The simplified tax invoice rule in Article 59(5)(b) uses consideration that does not exceed AED 10,000. They are separate tests with different wording.

How often do I need to re-verify a supplier?

At the first dealing, and again for a recurring supplier you have not verified in the previous 12 months. In practice, an annual refresh of each active supplier's file meets this.

What happens if I skip the checks?

Nothing, as long as the supply is genuine. The risk arises if the supply turns out to be connected to tax evasion: the FTA can then deny the input tax under Article 54(bis), and the missing checks make it hard to show you could not have known.

Disclaimer

General information for Gulf businesses, not tax advice. Regulations move: verify against the official FTA/ZATCA text or your advisor before acting.

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