UAE introduces mandatory VAT supplier and supply verification checks

Federal Tax Authority in the UAE sets new rules to deny input Value-Added Tax (VAT) recovery on supplies linked to tax evasion from October 1, 2026
The Federal Tax Authority (FTA) has issued new rules requiring businesses to verify their suppliers and the supplies they receive, or risk losing the right to recover input VAT on transactions connected to tax evasion.
FTA Decision No. 13 of 2026 sets out the due diligence measures businesses must follow under Article 54 bis of the VAT Law, a provision inserted by Federal Decree-Law No. 16 of 2025. The decision will take effect on October 1, 2026, giving businesses a narrow window to prepare.
The decision does provide a de minimis exemption under Article 6, for supplies below Dh10,000 – excluding VAT. However, this exemption is disapplied entirely once total supplies from a given supplier exceed Dh100,000 over the preceding twelve months, or are expected to exceed that threshold over the following twelve months, added Thomas Vanhee.
That works out to approximately Dh8,300 a month – a level most recurring supplier relationships are likely to cross without any particular red flag, meaning the exemption will offer limited relief in practice, he noted. Vanhee pointed out with just over a month remaining before the rules take effect, businesses across the UAE will need to move quickly to put verification policies and documentation processes in place.

(Source: Khaleej Times)

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