The UAE ties input-tax recovery to checking who you bought from

What changed in detail

The UAE Federal Tax Authority issued Decision No. 13 of 2026 on 22 July 2026, effective 1 October 2026, setting the measures, procedures and conditions a taxable person must fulfil to verify the validity and integrity of supplies received before deducting input tax under Article 54 bis of the VAT Law. Verification of the supplier differs by type: for a natural person, a valid proof of identity such as an Emirates ID or passport plus a meeting in person or virtually before the supply is made; for a legal person, verification of incorporation through official databases or the certificate of incorporation plus identification of the authorised director, agent or employee. The taxable person must also verify an actual place of business by electronic means or a field visit, and assess three quantified risk indicators: the supplier’s address changed more than twice in the previous 12 months, its key employees changed more than twice in the previous 12 months, or transactions disproportionate to the size and history of its business. Where supplies from a supplier exceed AED 375,000 over the previous 12 months or are expected to exceed that over the next 12, an unconditional written confirmation from an authorised bank in the State is required, together with a review of publicly available reviews and media coverage of the supplier. The supply itself must be assessed for commercial plausibility, authenticity and origin of the goods and the supplier’s right to dispose of them, and consideration must be paid by electronic means unless there is a documented commercial reason for cash. Verification is required on first dealing and again on recurrent dealings where the supplier has not been verified in the previous 12 months, must be documented and retained, and must be governed by a documented policy naming those responsible. A taxable person may disregard the measures where the consideration excluding VAT is less than AED 10,000, but that exception does not apply at all where the total value of supplies received from the supplier exceeds AED 100,000 over the previous 12 months or is expected to exceed it over the next 12.

What it means

Input tax has always needed a valid invoice. From 1 October it also needs evidence that you looked at who issued it, and that the evidence was kept. The AED 375,000 trigger is low enough to catch ordinary trading relationships rather than only unusual ones, and because the decision requires documentation of each step, the check has to live in the purchase-to-pay system rather than in a buyer’s judgement. The AED 10,000 floor is the only relief, and it is per supply, not per supplier.