DATE NEW RULES TOOK EFFECT
THRESHOLD FOR ENHANCED SUPPLIER CHECKS
SUPPLIER RE-VERIFICATION CYCLE
From 1 October 2026, a valid tax invoice is no longer enough to claim back the VAT you pay on purchases in the UAE. Under FTA Decision No. 13 of 2026, you now also need documented proof that you checked your supplier and the purchase before claiming input VAT. The good news: once you understand what the FTA expects, it's very manageable.
These rules have applied since 1 October 2026. Any input VAT you claim from now on should be backed by supplier and purchase checks.
The quick version (if you only read one section)
Check your supplier. Verify every new supplier, and re-check anyone you haven't verified in the last 12 months.
Check every purchase. Make sure what you bought fits the supplier's business and makes commercial sense.
Know your 3 numbers. AED 10,000, AED 100,000 and AED 375,000 decide how much checking a supplier needs.
Write it down. You need a written verification policy and a record of every check.
Skip the checks, lose the VAT. Without proof, the FTA can deny your input VAT claim.
What changed, and why
The FTA can now deny your input VAT if a purchase is linked to tax evasion anywhere in the supply chain, and you knew, or should have known, about it. This power comes from Article 54(bis) of the VAT Law, added by Federal Decree-Law No. 16 of 2025.
Decision No. 13 of 2026 spells out exactly which checks count as doing your homework. The key point: if you skip these checks, the FTA doesn't need to prove you knew about any fraud. Not checking is treated as “should have known,” and your input VAT can be refused.
VAT compliance has moved from “Do I have a tax invoice?” to “Can I prove I knew who I was dealing with?”
Step 1: Check who your supplier is
Verify a supplier the first time you deal with them, and again if you haven't verified them in the last 12 months. In practice, that means confirming:
They're a real, licensed business
A valid trade licence or incorporation documents, with matching company details.
Who represents them
The identity of the person authorised to act for the supplier.
They have a real place of business
An address you can confirm, not just a name on an invoice.
Also watch for red flags, such as a supplier who keeps changing address or key staff, or whose deals don't fit their size and history.
Step 2: Check each purchase makes sense
This is the more demanding step, because it applies to every purchase you claim VAT on, not just once per supplier. Before claiming, ask yourself:
Does what you bought fit what this supplier is licensed to sell?
Does the deal make commercial sense for your business?
Was it paid electronically, through a bank, rather than in cash?
If something feels off, check it before you claim, not after.
3 numbers to know
How much checking you need depends on the size of the purchase, and on how much you buy from that supplier over the year.
Below this, checks are generally not required. Supplies under AED 10,000 (excluding VAT) are usually exempt from verification…
…unless your total with that supplier goes above this. If your purchases from the same supplier exceed, or are expected to exceed, AED 100,000 over 12 months, the small-invoice exemption no longer applies.
Above this, extra checks apply. These include confirming the supplier's bank account and screening their reputation through publicly available information.
Small invoice ≠ small risk. Lots of small invoices from one supplier can add up past AED 100,000, and then every one of them needs checking.
If it's not documented, it didn't happen
Doing the checks isn't enough on its own. If the FTA asks, you need to be ready to show:
| Be ready to show | What it means in practice |
|---|---|
| What was checked, when, and by whom | A dated record of every supplier and purchase check, with the name of the person who did it |
| The evidence behind each check | Copies of licences, ID of the authorised representative, address checks, and bank confirmations where needed |
| A written verification policy | How your business verifies suppliers and purchases, with named responsibilities. The Decision requires one. |
Compliance is now a process, not just a filing. Your checks need to run every time you buy, not only when the VAT return is due.
What happens if you don't
The main risk is simple: the FTA can deny your input VAT. That means VAT you expected to claim back becomes a real cost, coming straight out of your profit. For a business with regular purchases, that adds up quickly over a year.
Start with your top 20 suppliers by spend. They usually cover most of your input VAT, so getting their files right first protects the biggest share of your claims.
Your quick checklist
Not sure your supplier files are ready?
Write a verification policy with named responsibilities
Build a file for every active supplier (licence, representative ID, address)
Re-check any supplier you haven't verified in the last 12 months
Track total spend per supplier against AED 100,000 over 12 months
Confirm bank details for suppliers above AED 375,000
Pay suppliers electronically and keep proof
Record what was checked, when and by whom, before claiming input VAT
Ready to get your supplier files in order?
At Booker Accounting & Consulting, we review your supplier files, set up a simple verification policy, and make sure every input VAT claim is backed by the right records. Talk to our team today.
Talk to our tax team →www.bookeraccounting.com/taxation
This guide is general information based on rules in force as of October 2026. It is not tax or legal advice. Requirements depend on your specific situation, so please speak to a qualified adviser before acting. Source: FTA Decision No. 13 of 2026. © 2026 Booker Accounting & Consulting.
