From 1 October 2026, UAE VAT-registered businesses must verify their suppliers before deducting input tax. FTA Decision No. 13 of 2026 makes supplier verification a formal condition for recovering input VAT: if you cannot show you checked who you bought from and that the supply was real, the Federal Tax Authority can deny the deduction. This guide sets out what to check, what evidence to keep, and how to build the check into your accounts payable process.
What FTA Decision No. 13 of 2026 requires
The decision targets a gap the FTA has flagged for years: input tax claimed on supplies that turn out to be linked, further up the chain, to missing traders and VAT fraud. From the effective date, the burden shifts to the buyer.
Before you deduct input tax on a supply, you must be able to demonstrate that you took reasonable steps to verify:
- Who the supplier is — legal name, licence, and that the person invoicing you is the person actually supplying the goods or services.
- That the supplier is VAT-registered where the supply requires it — check the TRN against the FTA's online tax registration lookup, not against a business card.
- That the supply actually took place — goods delivered or services performed, matching what the invoice describes.
- That the invoice is genuine — a valid tax invoice under Federal Decree-Law No. 8 of 2017 and its Executive Regulation, with the required fields, not a document dressed up to look like one.
- That payment matches the supply — payments to the supplier's own account, not to unexplained third parties.
The checks are proportionate: a one-off stationery order needs less diligence than a large recurring supply contract. What the FTA expects is a documented, risk-based process — not a signature on every invoice.
The verification checklist
| Check | What you verify | Evidence you keep |
|---|---|---|
| Supplier identity | Legal name and licence match the counterparty you contracted with | Trade licence copy, contract, correspondence |
| TRN validity | TRN is active and belongs to the supplier | Screenshot of the FTA TRN lookup, dated |
| Supply reality | Goods received / services performed as invoiced | Delivery notes, GRNs, service acceptance records |
| Invoice genuineness | Tax invoice carries all required fields under the VAT law | Copy of the tax invoice, filed per period |
| Payment integrity | Paid the counterparty's own bank account, same currency and country logic | Bank transfer records matched to invoices |
| Risk screen | Unusual patterns: newly registered supplier, invoice just under thresholds, third-party payment, unexplained price | AP risk notes for flagged suppliers |
Who it applies to, and from when
The decision applies to taxable persons registered for VAT and takes effect for supplies from 1 October 2026. It does not replace the existing input-tax recovery conditions — it adds a verification layer on top of them. A business that deducts input VAT without the verification evidence in place risks the deduction being denied in audit, plus the associated penalties, even where the underlying supply was genuine.
What happens in an audit
An FTA VAT audit (the FTA must give at least five business days' notice, and may look back five years — fifteen for evasion) now includes supplier-verification sampling. The auditor picks invoices, asks what checks you ran, and matches them against your records. A business that can produce dated TRN lookups, delivery evidence and payment records for the sampled invoices passes; a business that can only produce the invoices does not. Our guide on how long an FTA VAT audit takes covers the audit timeline in detail.
Building the check into accounts payable
- Gate new suppliers. No first payment until licence, TRN lookup and bank details are on file. Make it a field in your supplier master, not an email thread.
- Date-stamp the evidence. A TRN lookup from three years ago proves nothing at audit time. Re-verify high-risk suppliers annually and keep the dated screenshots.
- Flag the risk patterns. Third-party payments, suppliers registered days before the first invoice, invoice values that sit just under approval thresholds — route these to a second reviewer.
- Match invoices to reality. Three-way matching (order, delivery, invoice) is the strongest single control for goods; service acceptance records do the same job for services.
- Align with e-invoicing. Structured e-invoices through the Electronic Invoicing System will make invoice genuineness easier to prove — see the e-invoicing deadlines that apply from 1 January 2027 for larger businesses.
FAQs
Is supplier verification mandatory for all VAT-registered businesses in the UAE?
Yes, from 1 October 2026, under FTA Decision No. 13 of 2026. The depth of the check is proportionate to the supply, but every taxable person must be able to show reasonable verification before deducting input tax.
What documents prove I verified a supplier?
A dated FTA TRN lookup showing the supplier's active registration, a copy of the trade licence, the tax invoice itself, delivery or service-acceptance evidence, and bank records showing payment to the supplier's own account.
Can the FTA deny my input tax if the supplier turns out to be a missing trader?
That is the risk the decision addresses. If you did not take reasonable verification steps, the FTA can treat the input tax as unrecoverable and assess the VAT back, with penalties. Documented verification is your defence.
Make the check automatic
A verification rule only works if every invoice passes through it. Finanshels builds supplier verification, three-way matching and VAT-ready records into bookkeeping for UAE businesses — the same records that also carry your seven-year tax record obligations. Book a consultation to have your AP process checked before the next audit cycle.
Last reviewed: 18 October 2026, by Gautam Sanoj, Senior Tax Advisor at Finanshels. Rules are date-scoped to FTA Decision No. 13 of 2026; verify current guidance on tax.gov.ae before acting.
