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UAE VAT supplier verification starts 1 October: what FTA Decision No. 13 requires

From 1 October 2026, a UAE business registered for VAT has to verify its supplier before it deducts the input VAT on what it buys. Federal Tax Authority Decision No. 13 of 2026 sets out the checks, three spend thresholds that decide how deep they go, and the record a business must be able to show. Here is what the text says, and what the posts going around social media get wrong.

SEP 17, 2026 · 5 MIN READ · BY THE KYCK DESK

What changes on 1 October

FTA Decision No. 13 of 2026 was issued on 22 July 2026, published in August and takes effect on 1 October 2026. It implements Article 54 bis of the VAT Law, which allows the Federal Tax Authority to refuse an input VAT deduction where the supply is connected to tax evasion and the buyer knew, or should have known, about it. The Decision answers the practical question that article left open: what does a buyer have to do to show it could not have known?

The answer is a verification routine. A taxable person verifies the supplier at the first dealing, and again on later dealings if that supplier has not been verified in the previous 12 months. Holding a valid tax invoice is still necessary, but it no longer shows on its own that the buyer did its part.

Who it applies to

The Decision applies to VAT-registered taxable persons that deduct input VAT on supplies received in the UAE. It is a tax measure. It is not an anti-money laundering rule, it does not come from the Ministry of Economy, and it does not create a register that suppliers have to join. A business that is not registered for VAT, or that does not recover input VAT, is outside its scope.

The checks

For the supplier, the buyer confirms four things: identity and incorporation records checked against official sources, the identity of the person authorised to represent the supplier, a real place of business, and a short list of risk indicators such as recent changes of address or personnel and transactions out of proportion to the supplier's size. For an individual supplier, that means an identity document and a meeting, in person or by video.

For the supply itself, the buyer looks at whether the transaction has a genuine commercial purpose, whether the price is commercially justified, whether the goods or services fall within the supplier's licensed activities and whether payment is made electronically, with a documented reason where cash is used.

Two further obligations sit around the checks. The business needs a written policy that names who performs the verification, who reviews it and who supervises it. And the evidence has to be kept in a form that can be produced during an FTA audit, with the date each check was made.

Three thresholds decide how deep the check goes

The middle row is the one most businesses miss. Small invoices are not exempt on their own: a year of invoices under AED 10,000 from the same supplier can cross AED 100,000, and from that point every supply from that supplier needs the full check.

What is at stake

The consequence is the input VAT itself. Where a supply turns out to be connected to tax evasion, the FTA must deny the deduction if the buyer knew, and may deny it if the buyer should have known. The Decision does not set out fines, and it does not freeze refunds across the board. The exposure is five percent of the value of every affected purchase, assessed after the fact, on the strength of the file the business can or cannot produce.

What the viral posts get wrong

• It does not apply to every business in the UAE, only to VAT-registered businesses deducting input VAT.
• It does not introduce new fines. The risk is losing the input VAT on the affected supplies.
• It is not a KYC or AML law, although the checks look familiar to anyone who has onboarded a counterparty.
• It does not require suppliers to register anywhere. The duty sits with the buyer.
• The 12-month renewal is not a calendar deadline for the whole vendor list. It is measured per supplier, from the last time that supplier was verified.

What to do before 1 October

• Pull 12 months of purchase data and sort suppliers into the three bands by cumulative spend.
• Write the verification policy and name the people who perform, review and supervise the checks.
• Collect incorporation documents, representative identity and proof of premises for every supplier above AED 100,000, and bank confirmation letters for those above AED 375,000.
• Record the date of every check, because the 12-month clock runs from it.
• Add the check to supplier onboarding and to invoice release, so a new supplier cannot be paid before it has been verified.

This is the same work a compliance team does when it onboards a counterparty, applied to the vendor master. KYCK collects the supplier's documents through a link, screens the company and the people behind it, dates every check and keeps the file ready to export. See how counterparty onboarding works, or use the counterparty due diligence checklist as a starting point.

KYCK Limited is an independent software provider and is not affiliated with, endorsed by or acting for the Federal Tax Authority. This article is general information, not tax or legal advice. Confirm how the Decision applies to your business with the FTA or a licensed tax adviser.

Sources

• Federal Tax Authority: Decision No. 13 of 2026 on the verification of the validity and integrity of supplies
• Khaleej Times: UAE introduces mandatory VAT supplier and supply verification checks

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