Supplier Verification for Input VAT in the UAE: What FTA Decision No. 13 Requires

Supplier verification for input VAT means checking that a supplier is genuine, has a real place of business, and that the underlying supply makes commercial sense, before you deduct the VAT on its invoice. Under FTA Decision No. 13 of 2026, issued for Article 54 bis of the UAE VAT Law, a valid tax invoice is no longer enough on its own. You also need documented evidence that you ran the required checks.

Key takeaways

• Verification applies to VAT-registered businesses claiming input VAT, subject to small-purchase exceptions.
• Purchases under AED 10,000 (excluding VAT) are exempt, unless total purchases from that supplier exceed AED 100,000 in the previous or next 12 months.
• Companies need a trade licence or certificate of incorporation, the representative’s ID, and a check of the physical business address.
• Individuals and freelancers need ID and a physical or virtual meeting before the supply.
• Suppliers above AED 375,000 a year need an unconditional UAE bank confirmation.
• All evidence must be kept for FTA inspection.

Why the FTA introduced these checks

Input VAT recovery is where VAT fraud tends to concentrate: fake suppliers, invoices for supplies that never happened, and chains built to generate refunds. Decision No. 13 puts part of the responsibility on the buyer. As the decision has been summarised by tax advisers, the FTA can deny input VAT where a supply or supply chain is connected to tax evasion and the buyer knew, or should have known, about it. Skipping the prescribed checks weakens your position if a supplier turns out to be a problem.

The decision doesn’t replace the existing conditions for recovering input VAT, and following the procedures doesn’t guarantee recovery. It adds a verification layer on top.

When verification is required: the thresholds

Situation	Verification needed?
Purchase under AED 10,000 (excluding VAT), and total purchases from that supplier stay within AED 100,000	No, exempt
Total purchases from the same supplier exceed AED 100,000 in the previous or next 12 months	Yes, whatever each invoice’s size
Supplier is above AED 375,000 in supplies over 12 months (or expected to be)	Yes, plus bank confirmation

Because the AED 100,000 test looks backwards and forwards, small invoices can add up to a supplier who needs a full file. Track cumulative spend by supplier, not just invoice by invoice.

Step 1: Verify supplier identity and location

Legal entities and companies

• A valid trade licence or certificate of incorporation
• The Emirates ID or passport of the authorised representative
• Verification of the supplier’s physical business address

Individuals and freelancers

• A valid Emirates ID or passport
• A physical or virtual meeting with the supplier before the supply takes place

Checks for every supplier

Verify the supplier’s physical business location and that it suits the business activity. A trade licence for a warehouse business with no warehouse, or a consultancy at a mailbox, should prompt questions before you pay.

Step 2: Add bank verification for high-value suppliers

Where supplies exceed, or are expected to exceed, AED 375,000 in a 12-month period, the supplier needs extra scrutiny. You must obtain an unconditional UAE bank confirmation of the supplier’s bank account. This links the supplier to a real, regulated account and helps spot payments routed to someone else.

Step 3: Verify the supply and the transaction

Verifying the supplier isn’t enough. You also need to confirm that:

• the goods or services fall within the supplier’s licensed activities
• the supplier can prove the authenticity, origin and ownership of the goods, or the right to dispose of them, where applicable
• the commercial purpose and pricing make sense
• payments to third parties or foreign bank accounts are supported by a justification

Unusual pricing, a supplier outside its licensed activity, or a request to pay a different party are the warning signs these checks exist to catch.

Step 4: Keep the evidence for FTA inspection

Retain every verification document and supporting record for FTA inspection, as part of your VAT compliance file, for the full VAT record-retention period. Evidence you can’t produce is treated as a check you didn’t do.

How to build supplier verification into your process

Treating this as a one-off project means the file goes stale. Build it into how you buy:

1. Write a short verification policy. State the thresholds, who checks, which documents, and who approves exceptions.
2. Check at onboarding. No new supplier is set up for payment until its file is complete.
3. Track spend by supplier. Flag when a vendor approaches AED 100,000 and AED 375,000 in 12 months.
4. Hold payment until verified. Make accounts payable confirm a complete file before approving invoices where it applies.
5. Re-verify on a schedule. Tax advisers’ summaries of the decision indicate checks should be repeated at least every 12 months for continuing suppliers.
6. Store everything centrally. One folder per supplier, with documents, meeting notes, bank confirmation and the pricing justification.

Common mistakes to avoid

• Relying on the tax invoice alone. A valid invoice is necessary but no longer enough.
• Judging invoice by invoice. Small purchases can still trigger verification once the supplier’s total passes AED 100,000.
• Verifying once and forgetting. Details, licences and addresses change.
• Accepting a virtual address. The physical business location needs to be real and suitable.
• No justification for third-party or foreign payments. Write down why and keep the evidence.

How AK Global can help

AK Global supports UAE businesses with VAT registration and filing, accounting and bookkeeping, and virtual CFO services. We can help you review your procurement and payables process, keep VAT records organised, and tighten input VAT recovery before the FTA asks questions.

Not sure your supplier files would stand up to review? Book a free consultation with AK Global.

Frequently Asked Questions

What is FTA Decision No. 13 of 2026?

It is a Federal Tax Authority decision, issued for Article 54 bis of the UAE VAT Law, that sets the measures, procedures and conditions for verifying suppliers and supplies before deducting input VAT. It has applied since 1 October 2026.

Do I need to verify every supplier?

Not always. Purchases under AED 10,000 (excluding VAT) are exempt, unless total purchases from the same supplier exceed AED 100,000 in the previous or next 12 months. Above those thresholds, the checks apply.

What documents do I need for a company supplier?

A valid trade licence or certificate of incorporation, the Emirates ID or passport of the authorised representative, and verification of the supplier’s physical business address.

What do I need for an individual or freelancer?

A valid Emirates ID or passport, and a physical or virtual meeting with the supplier before the supply.

What extra checks apply to suppliers above AED 375,000?

You need an unconditional UAE bank confirmation of the supplier’s bank account, where supplies exceed or are expected to exceed AED 375,000 in a 12-month period.

Can I lose my input VAT if I skip the checks?

It increases the risk. The FTA can deny input VAT where a supply chain is linked to tax evasion and the buyer knew or should have known, and failing to perform the prescribed verification weakens your defence.

How long must I keep verification records?

Keep them for FTA inspection as part of your VAT records, for the VAT retention period, which is generally five years.

Does this apply to all VAT-registered businesses?

It applies to taxable persons claiming input VAT, subject to the limited exceptions in the decision. It isn’t restricted by business size or sector.