New supplier and transaction verification requirements from 1 October 2026
For many businesses, the process of claiming Input Tax has traditionally been straightforward: receive a valid Tax Invoice, record the purchase and recover the VAT.
That is no longer the whole story.
The UAE Federal Tax Authority (“FTA”) has issued Decision No. 13 of 2026, setting out measures for the verification of suppliers and taxable supplies in the context of Input Tax recovery. The requirements take effect from 1 October 2026.
The Decision places greater emphasis on the substance of a transaction and the parties involved. In practical terms, businesses should be able to demonstrate that they have taken reasonable steps to understand who they are buying from, what they are buying and whether the transaction is commercially genuine.
What do businesses need to do?
The requirements can broadly be considered in two areas: supplier verification and transaction-level verification.
| Supplier Verification – Know who you are buying from | Transaction-Level Verification – Know what you are buying and why |
|---|---|
| Verify the supplier’s identity, legal status and relevant license. | Assess whether there is a genuine commercial reason for the transaction. |
| Confirm the identity and authority of the person representing the supplier. | Consider whether the price and payment terms are commercially reasonable. |
| Verify that the supplier has a genuine business address appropriate to its activities. | Confirm that the supplier is authorised to provide the relevant goods or services. |
| Consider potential red flags, such as frequent changes in address or key personnel, or transactions that appear unusual for the supplier. | Where goods are involved, consider their origin, authenticity and ownership. |
| For suppliers where annual supplies exceed, or are expected to exceed, AED 375,000, perform additional checks, including verification of the supplier’s bank account and review of reliable publicly available information. | Where an intermediary is involved, consider whether there is a genuine and commercially justifiable reason for its involvement. |
| Re-verify where the supplier has not been verified during the preceding 12 months. | Ensure payment arrangements are appropriate and can be supported by evidence. Use electronic payment methods where possible. |
The purpose is not to turn routine procurement into a forensic investigation. Rather, businesses should have appropriate controls to identify transactions or suppliers that may present a VAT compliance risk.
What about smaller purchases?
The Decision provides a limited exception for smaller transactions.
Where the consideration for an individual supply, excluding VAT, is less than AED 10,000, the prescribed verification measures may generally be disregarded. However, this exception does not apply where total supplies from the same supplier exceed, or are expected to exceed, AED 100,000 over the relevant 12-month period. Businesses should therefore monitor both individual transaction values and cumulative spend by supplier.
The three thresholds to keep in mind are:
- AED 10,000 – individual supply threshold
- AED 100,000 — supplier-level threshold affecting the small-purchase exception
- AED 375,000 — additional supplier verification requirements
Verification is only useful if you can demonstrate it
The new requirements make documentation particularly important. Businesses should retain evidence of the verification procedures performed and maintain a documented policy setting out who is responsible for performing, reviewing and overseeing the process. In practice, this means being able to answer a simple question if the FTA reviews a transaction:
What did you check, when did you check it, and what evidence did you rely on?
The objective should be to build these checks into existing procurement and finance processes rather than create a separate exercise for the tax team.
What does this mean in the context of e-invoicing?
The timing of Decision No. 13 is particularly relevant given the UAE’s move towards mandatory e-invoicing, with the first businesses entering mandatory implementation from 1 January 2027.
Although e-invoicing and the new verification requirements have different objectives, they point towards the same broader direction of travel.
E-invoicing will provide structured digital information about the invoice and transaction. Decision No. 13 places greater focus on the supplier and the substance behind that transaction.
This means that VAT compliance is increasingly moving beyond the question of whether a business has a valid Tax Invoice.
The broader question is becoming:
Can the business demonstrate that the transaction is genuine, the supplier is legitimate and the information supporting the transaction is consistent?
This is where the two developments become particularly relevant for businesses.
Supplier information, purchase orders, invoices, payments, accounting records and VAT returns should increasingly be viewed as connected parts of the same transaction trail.
For this reason, businesses should avoid treating e-invoicing as simply an invoicing or IT project. It is an opportunity to review the wider procure-to-pay and VAT control environment, including supplier onboarding, purchase approvals, invoice processing, payments and Input Tax recovery.
What should businesses do now?
With the new requirements taking effect from 1 October 2026, businesses should consider the following:
- Review supplier onboarding: Ensure the required supplier checks are incorporated into the existing process.
- Review procurement and payment controls: Consider how unusual transactions, payment arrangements and intermediaries are identified and documented.
- Monitor the thresholds: Ensure systems can track the AED 10,000, AED 100,000 and AED 375,000 thresholds.
- Create a practical verification process: Establish clear responsibilities and a simple process for recording the checks performed.
- Train relevant teams: Ensure procurement, finance and tax teams understand the new verification and documentation requirements.
- Prepare for e-invoicing together: Consider how supplier, procurement, invoice, payment and VAT data can be connected as part of the e-invoicing implementation.
Our view
- Decision No. 13 of 2026 is more than an additional VAT checklist.
- It is another indication that the UAE tax environment is moving towards greater transparency, stronger controls and more data-driven compliance.
- With e-invoicing coming into effect at the same time, businesses should start thinking beyond the Tax Invoice and towards the complete transaction lifecycle.
- The businesses best placed to manage this change will be those that bring procurement, finance and tax controls together — ensuring that the commercial transaction, accounting records, VAT treatment and supporting data all tell the same story.
How Can We Help?
- VAT Compliance Health Check
Review existing supplier and transaction verification processes and identify potential gaps and Input Tax recovery risks.
- Supplier Verification Framework
Develop practical supplier and transaction-level procedures, documentation requirements and internal policies aligned with the new requirements.
- E-invoicing & VAT Readiness
Assess how procurement, finance and VAT processes can be integrated to support e-invoicing and strengthen the overall tax control framework.
Who are we?
Re/think is an award-winning regional multi-service business advisory and outsourced services firm providing accounting, regulatory and compliance, tax and VAT advisory, audit, HR consultancy and recruitment services to regulated firms, multi- and single-family offices, and other operating businesses.
Established in the UAE in 2013, the firm has 80+ staff across three offices in Dubai and Abu Dhabi providing clients with timely, proactive and customized business solutions – from set-up and early development to the latest stages of a business lifecycle.
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