The UAE Federal Tax Authority has introduced a more structured due diligence framework for businesses recovering Input Tax.
Under FTA Decision No. 13 of 2026, taxable persons are expected to carry out defined checks to verify the validity and integrity of suppliers and transactions before recovering Input Tax.
The Decision provides further guidance on Article 54(bis) of the UAE VAT Law and will take effect from 1 October 2026.
What Is Changing?
Traditionally, businesses have focused heavily on maintaining a valid tax invoice and supporting documentation when recovering Input Tax.
The new framework introduces a broader expectation.
Businesses will need to demonstrate that reasonable steps were taken to verify the legitimacy of suppliers and the integrity of the underlying transactions. This may include reviewing supplier identity, place of business, risk profile, banking information and the commercial rationale of a transaction.
Due Diligence Becomes an Ongoing Process
The requirements extend across the supplier relationship.
Suppliers should be verified at the first dealing, or where relevant, when they have not been verified during the previous 12 months. Importantly, the Decision also requires verification of each taxable supply received or accepted, rather than relying on sample based checks.
Businesses must also maintain records of the verification steps performed and supporting documentation.
In addition, a documented policy should identify who is responsible for implementing, reviewing and supervising these procedures, creating clearer ownership around VAT due diligence.
What Should Businesses Review Before October?
Many organisations already have supplier onboarding, procurement and compliance procedures in place.
The practical question is whether those existing processes provide the level of evidence now expected by the FTA.
Businesses may therefore need to review their vendor onboarding, approval workflows, documentation standards, transaction checks and governance processes before the new requirements become effective.
The objective is not simply to introduce additional checks, but to integrate the required due diligence into existing procurement and VAT processes in a practical and documented manner.
How MCA Gulf Can Help
MCA Gulf can support businesses with a focused readiness review to identify potential areas of Input Tax recovery exposure, assess existing controls against the new Decision, develop the required policies and procedures, and prepare teams to evidence compliance during future FTA reviews.
For a working session, contact us.
Download the Guide
Download our guide for a practical overview of FTA Decision No. 13 of 2026 and the new Input VAT due diligence requirements effective from 1 October 2026.
