The FTA's new supplier checks: what you have to do by October

By Consaya Editorial — 2026-08-30

The Federal Tax Authority just changed what you need before you can claim back input tax. Not the invoice rules. Not the rates. What you have to have done before you rely on that invoice.

Until now, recovery rested largely on the seller's paperwork. You held a valid tax invoice, you took the deduction. From 1 October 2026 that isn't the whole test. Decision No. 13 of 2026 makes input tax recovery conditional on verifying your supplier and the supply, under Article 54(bis) of the VAT Law. It was issued on 22 July and only turned up on the FTA's legislation page in late August, which is part of why it caught people out. The teeth are in what happens when a supply turns out to be connected to tax evasion. Recovery can be refused, and the checks you did or didn't do before deducting bear on whether yours survives. Part of the burden moved onto the buyer.

The idea is straightforward enough. If a supplier is fictitious, fraudulent, or trading outside its licence, the FTA would rather you found out than it did. So you have to know who you are buying from, and be able to show it.

What you check about the supplier

Start with identity. Buying from an individual means obtaining valid identification, an Emirates ID or a passport, and meeting them before the supply, in person or virtually. For a company, confirm incorporation through official databases or the certificate itself, and verify the identity of whoever is authorised to act for it.

Next, confirm the supplier has a real place of business. You do that by appropriate electronic means or a field visit, and it has to fit the activity they claim to carry out. A logistics company operating out of a residential flat is exactly the mismatch this is looking for.

Then three risk flags. Has the supplier changed its address more than twice in the past 12 months? Changed its key people more than twice? Are the transaction volumes out of proportion to the size and history of the business? If any of those apply, you keep a clear written explanation of why you went ahead. The FTA can ask for it, and "it seemed fine" is not an explanation.

Above a threshold, two more checks land. Where supplies from that supplier exceed AED 375,000 over the past 12 months, or are expected to over the next 12, you need written confirmation from an authorised UAE bank that the supplier holds an account, with no reservations or conditions attached to it. Worth knowing: the Decision doesn't require that confirmation to be issued to you, so a supplier can hand over one it already holds. You also review credible public reviews and media coverage for signs of trouble. Not to settle the question. To catch what a search would have caught.

What you check about the supply

Supplier verification is only half of it. Article 4 asks you to look at the transaction. Does the supplier have a genuine commercial reason to be in the deal? Do the payment terms make commercial sense?

Payment should be electronic. Cash needs a documented reason and has to stay inside the legal thresholds. A third party in the payment chain, or payment to a bank account outside the supplier's country of incorporation, needs a reasonable explanation. Prices and margins shouldn't sit far from the market without one either. The goods or services have to fall within the supplier's licensed activity, and the origin and ownership of goods have to be verifiable.

Where the supplier is an intermediary, its role needs a clear commercial rationale. That reads as aimed at the chains where a middleman exists to move paper rather than goods, though the Decision doesn't say so in as many words.

The thresholds that decide when it applies

None of this hits every purchase equally. The heaviest checks fall on the larger relationships, which is at least a sensible piece of drafting. Under AED 10,000 for a supply, excluding VAT, you may set the measures aside. That exemption falls away once total supplies from the supplier pass AED 100,000 over a 12-month period, or are expected to. So ten small orders from the same supplier with more coming is not ten small orders. It's a relationship you have to verify.

Above AED 375,000 over 12 months, the bank confirmation and the reputation review sit on top of everything else. Your biggest suppliers get the most work, which is also where a fictitious one would cost you the most.

Building the process before October

Article 5 makes clear this is a process rather than a single gesture. You verify a supplier on the first dealing, and again on recurring dealings if you haven't verified it in the past 12 months. Every taxable supply gets assessed. Every step gets documented and retained with the transaction, so a later FTA review can follow the trail.

You also need a written policy naming who runs the checks, who reviews them, who supervises, and what their powers are. For most firms the practical job between now and October is to put that into the accounts payable routine: set the policy, build the checklist, decide at what value each tier of check kicks in, and file the evidence against the invoice rather than in someone's inbox.

Consaya doesn't run these checks for you, and I'd be careful of anything that says it does. What it does is keep the books filing-ready underneath them, generate the VAT 201 and corporate tax packs, and flag what's due before it's late. The verification file becomes the one new thing you're building, instead of one more job stacked on a pile of late reconciliations.

Businesses that treat supplier verification as a routine control will keep their deductions. The ones assembling a file after the query arrives are arguing from behind, with the FTA already holding the questions.

You've got about a month.

Primary source: FTA Decision No. 13 of 2026 (tax.gov.ae). Commentary: https://www.fwglobal.ae/insights/input-tax-supplier-verification/ · https://www.arabianbusiness.com/business/uae-new-tax-rules