On 1 October 2026, holding a valid tax invoice stops being enough to recover input VAT in the UAE. You will also need a file showing you checked who the supplier is and whether the purchase made commercial sense. Most finance teams we speak to have not built that file yet, and the deadline is four weeks away.
TL;DR: FTA Decision No. 13 of 2026 takes effect on 1 October 2026. Before deducting input tax you must verify the supplier and the supply, and document both. Purchases under AED 10,000 are exempt unless you buy more than AED 100,000 from that supplier in 12 months. Above AED 375,000 a year, bank and reputation checks are added. Skip the checks and the FTA can refuse the deduction.
What Actually Changes on 1 October 2026?
The Federal Tax Authority issued Decision No. 13 of 2026 on 22 July, and it applies from 1 October 2026. It sets out the due diligence you must carry out before deducting input tax under Article 54 bis of the VAT Law, the anti-evasion provision added by Federal Decree-Law No. 16 of 2025 (EY, 2026).
Article 54 bis already let the FTA deny input tax where a supply chain is connected to evasion and the buyer knew, or should have known, about it. We covered that power when the UAE VAT amendments took effect in January. What was missing was the standard. Decision 13 supplies it.
The practical shift is who carries the burden. Before, the FTA had to build a case that you should have known. Now, if you cannot show the required checks were done, you are treated as someone who should have known.
Which Purchases Are Caught by the New Checks?
Most of them. The rules run on three thresholds, and the first one is narrower than it looks.
| Threshold | What it does |
|---|---|
| Under AED 10,000 per supply (excluding VAT) | Checks can be skipped |
| Over AED 100,000 from one supplier in 12 months | The AED 10,000 exemption falls away for every invoice from that supplier |
| Over AED 375,000 from one supplier in 12 months | Adds bank account confirmation and a public reputation review |
The AED 100,000 test looks backwards over the previous 12 months and forwards over the next 12 (Khaleej Times, 2026). A regular supplier billing you AED 9,000 a month crosses it inside a year, which pulls every one of those small invoices back into scope.
What we see most often is a purchase ledger where two or three dozen suppliers sit above AED 100,000 and nobody has ever run a formal check on any of them.
What Do You Have to Check About the Supplier?
Supplier verification happens when you first deal with a company, and again whenever more than 12 months have passed since the last check (NR Doshi & Partners, 2026). There is no grandfathering for suppliers you have used for years.
- Identity documents for individuals, or incorporation and licence details for companies
- Confirmation of who is authorised to act for the supplier
- A real place of business, confirmed electronically or by site visit, that fits the activity they claim to carry out
- A review of risk indicators such as address changes, turnover in key personnel, and transaction sizes out of proportion to the business
- Above AED 375,000 in 12 months, bank account confirmation and a check of publicly available information
Each of those steps has to be recorded. The FTA expects to see the evidence, not an assurance that someone looked.
The Second Test Applies to Every Purchase
Supplier checks are done once a year. Supply checks apply to every taxable supply you receive, which is the part that changes daily workflow.
- A genuine commercial reason for that supplier being in the chain
- Payment terms and methods that make commercial sense, with electronic payment preferred and any cash settlement backed by a documented reason
- Pricing in line with the market
- Goods or services that fall inside the supplier's licensed activities
- Title and origin of the goods
- A justification for any intermediary sitting between you and the real supplier
Third-party payments, transfers to foreign bank accounts, and cash all attract extra scrutiny (EY, 2026). One question clients always ask is whether a long relationship excuses the check. It does not. The test is applied supply by supply.
How Do You Verify a Supplier in Practice?
Start with the TRN. The FTA runs a free TRN Verification tool on tax.gov.ae under Quick Links, with no login needed. Enter the 15 digit number exactly as printed on the invoice, and the tool returns the registered legal name. If that name does not match the invoice header, stop and ask why before you pay.
Then check the trade licence with the issuing authority, whether that is the emirate's Department of Economic Development or a free zone registrar, and compare the listed activities against what you are actually buying. A logistics licence does not cover consultancy fees.
For the address, a video call from the supplier's premises is usually enough for smaller vendors, and a site visit is reasonable for your largest ones. Above AED 375,000, ask for a bank letter confirming the account you pay into belongs to the supplier.
Finally, write the policy. Decision 13 requires a documented policy naming who performs, reviews and supervises the checks. One page is fine, provided the names are real.
What Happens If You Skip the Input VAT Checks?
The FTA can refuse the input tax deduction on any supply linked to an evasion chain. That turns a 5% VAT charge into a real cost, on top of the shortfall on the return you already filed and separate from the ordinary VAT return penalties that already apply.
Enforcement is not theoretical. The FTA conducted 103,680 inspection visits in the first half of 2026, up 21% year on year, identifying AED 174 million in tax liabilities and administrative penalties (FTA, 2026). Formal tax audits rose 46% in 2025 (NR Doshi & Partners, 2026).
If a review of your own ledger turns up claims you can no longer support, file a voluntary disclosure on Form 211 in EmaraTax. Under the revised penalty regime that costs 1% per month on the tax difference, against 15% plus 1% per month once the FTA has notified you of an audit (BDO, 2026). Errors with a net impact over AED 10,000 must be disclosed within 20 business days of discovery.
Your Plan Before 1 October
Pull a supplier report for the last 12 months and rank it by value. Anything over AED 100,000 needs a full file before your next return, and anything over AED 375,000 needs the bank and reputation layer on top.
When we reviewed a client's purchase ledger last month, four suppliers above the AED 375,000 line had no licence copy on record and one had a TRN that returned a different legal name. Both gaps took a morning to close, and neither would have survived an audit.
Then fix the intake. Add TRN and licence verification to your supplier onboarding form, set a 12 month diary reminder for re-verification, and store the evidence where the VAT file lives rather than in a buyer's inbox. Records supporting a VAT position must be kept for five years, so build for retrieval and not just for October.
Frequently Asked Questions
Do I need to re-check suppliers I have used for years?
Yes. Verification is required whenever a supplier has not been checked in the previous 12 months, and there is no exemption for established relationships. Work through everyone above the AED 100,000 line before your first return covering October.
Does this apply to services as well as goods?
Yes. The supply checks cover every taxable supply you receive. Origin and title read more naturally for goods, but the commercial rationale, pricing and licensed activity tests apply equally to consultancy, marketing and other service purchases.
Does this change who has to register for VAT?
No. The registration thresholds are unchanged at AED 375,000 mandatory and AED 187,500 voluntary. Decision 13 only affects businesses already registered and recovering input tax, and it sits alongside the January 2026 changes to reverse charge documentation and refund deadlines covered in our 2026 VAT amendments guide.
What if the supplier refuses to provide documents?
Treat that as a risk indicator in its own right. You can still buy from them, but you cannot support the input tax claim, so price the VAT in as a cost or find another supplier. Most legitimate businesses hand over a trade licence without argument.
If you would like a second pair of eyes on your purchase ledger before 1 October, get in touch. As part of our UAE VAT compliance work we can rank your suppliers against the AED 100,000 and AED 375,000 thresholds, tell you which files are missing, and draft the verification policy the decision asks for.