New FTA Rule: Supplier Verification Now Required to Claim Input VAT (From October 2026)

A Valid Tax Invoice Is No Longer Enough

The Federal Tax Authority has issued Decision No. 13 of 2026, introducing mandatory supplier and supply verification checks before a business can recover input VAT. It takes effect on 1 October 2026 and it changes what "proper documentation" means for every VAT-registered business in the UAE.

Until now, a valid tax invoice was generally sufficient to support an input VAT claim. Under the new rules, the FTA can deny recovery if a supply is connected to fraudulent activity and the recipient knew, or reasonably should have known particularly where the required verification steps weren't performed.

Supplier Verification: What You Must Check

Before working with a new supplier and again every 12 months businesses must perform basic checks on every supplier:

• Confirm identity documentation (valid ID/passport for individuals; incorporation documents for companies)

• Verify a genuine physical place of business, through electronic checks or a site visit

• Watch for risk flags: more than two address or personnel changes in 12 months, or transaction volumes disproportionate to the supplier's size

For suppliers whose annual supplies exceed AED 375,000, enhanced checks are required on top of the basics: written bank account confirmation, and a review of publicly available reputation information.

Supply Verification: Checks on Every Transaction

Alongside supplier-level checks, every individual supply now needs its own justification. Businesses must be able to show:

• A genuine commercial purpose behind the transaction

• Pricing that's reasonably aligned with market rates

• Goods or services that match the supplier's licensed business activities

• A clear, documented rationale for any intermediaries involved

• Payment made electronically where possible cash payments need documented justification

The Thresholds to Know

• Below AED 10,000 per supply reduced verification may apply

• Above AED 100,000 in aggregate from one supplier full verification is required regardless of individual invoice size

• Above AED 375,000 in annual supplies enhanced checks (bank confirmation, reputation review) become mandatory

Getting Ready Before October

The FTA also expects businesses to maintain a written policy naming who performs, reviews, and supervises these checks, plus retained records for every verification carried out. With just over a month until the rule takes effect, the practical starting point is simple: list your active suppliers, flag which ones cross the AED 375,000 threshold, and start building a due-diligence file for each one now rather than scrambling in September. If you're not sure how this applies to your supplier base, it's worth having your VAT process reviewed before the FTA reviews it for you.