FTA Decision No. 13 of 2026: verification before input tax deduction

Two duties, one consequence

Decision No. 13 sets two verification duties. One runs to the supplier and is performed when the relationship starts and periodically after that. The other runs to each taxable supply received and is performed before the input tax on it is deducted.

Both are conditions attached to the deduction itself, under Article 54 bis of the VAT Decree-Law. A business that has not carried out the verification the Decision describes may find the deduction unavailable to it.

Read together, the duties move a tax outcome onto acts performed by people who do not prepare the VAT return.

Verifying the supplier

Article 3 applies when a business deals with a supplier for the first time, and again where twelve months have passed since the last verification. What is required differs by the kind of person supplying.

1. 01

   A natural person

   A copy of valid proof of identity, and a meeting with the supplier — in person or virtually — before the supply takes place.

2. 02

   A legal person

   Verification of incorporation, verification of the identity of the authorised representative, and confirmation of the actual place of business.

3. 03

   Risk indicators

   Whether the supplier has changed its address or key employees more than twice in twelve months, and whether its transactions are unusual or disproportionate. Where an indicator is present, a justified explanation is kept on file.

The twelve-month cycle makes this a standing obligation on the vendor master rather than a step completed once at onboarding.

Verifying each supply

Article 4 applies to each taxable supply received or accepted, before the input tax on it is deducted. The checks are directed at whether the transaction is what it appears to be.

These are judgments about a transaction, made close to it. They are difficult to reconstruct from a ledger months later.

The policy, and the record

Article 5 requires the verification steps to be documented and the supporting records retained so the Authority can examine them.

It also requires a written policy. The policy names the persons responsible for implementing, reviewing and supervising the procedures, sets out their powers, and is held at a designated document location.

A business with sound informal practice and no written policy has the practice but not the document the Decision asks for.

Where value changes the work

Article 6 sets the points at which the obligations relax or intensify. Each is measured against supplies from a single supplier over the previous twelve months, or expected over the next twelve.

1. 01

   Below AED 10,000

   The measures need not be applied to a supply where the consideration excluding VAT falls below this amount.

2. 02

   Above AED 100,000

   The small-value exception is unavailable where supplies from that supplier exceeded, or are expected to exceed, this amount.

3. 03

   Above AED 375,000

   Enhanced checks apply: evidence of a UAE bank account, and a review of public information and the supplier’s business reputation.

Because the thresholds are measured per supplier across a rolling period, whether a single invoice is in scope is a question about the supplier’s running total, not about the invoice.

What this asks of an enterprise

The duties are drafted around acts rather than conclusions: a meeting held, an incorporation verified, a price compared, an explanation written down, a policy that exists. Each act happens at a moment, and the evidence of it is created at that moment or not at all.

That places the input tax position across four functions. Procurement and vendor onboarding perform the supplier checks. Accounts payable performs the supply checks. Master data carries the verification state and the running totals the thresholds depend on. Tax holds the position and answers for it.

Effective date

The Decision takes effect on 1 October 2026. Deductions taken from that date rest on the verification it describes.