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5 Essential Checklist Items for UAE Businesses Ahead of FTA Decision No. 13 of 2026

With the Federal Tax Authority’s (FTA) Decision No. 13 of 2026 taking effect on October 1, 2026, the rules around claiming Input Tax deductions are changing. Compliance is no longer just about holding a valid tax invoice; it is about proving active due diligence on both your suppliers and your transactions.

Here is a 5-step checklist to ensure your finance, procurement, and tax teams are ready.

Step 1: Update Your Vendor Onboarding & KYC Process

You can no longer onboard a vendor with just a trade license and a handshake. Ensure your onboarding workflow captures:

  • Valid Emirates IDs or passports for natural persons / authorized representatives.

  • Official incorporation verification for corporate entities.

  • Proof of a physical business location matching their licensed activities.

Step 2: Establish a Risk-Tracking Mechanism

Watch out for structural red flags that could jeopardize your Input Tax deduction:

  • Has the supplier changed their address more than twice in the last 12 months?

  • Have key managers or primary contacts turned over unusually fast?

  • Do transaction volumes make sense relative to the supplier’s business size?

  • Note: If these triggers occur, you must retain clear, written justifications.

Step 3: Screen High-Value Suppliers (AED 375,000+ Threshold)

For suppliers where past or expected transaction values hit or exceed AED 375,000 over a 12-month period, make sure your files include:

  • A written confirmation letter from an authorized UAE bank confirming their active bank account.

  • A review of public sources, media coverage, and reviews to ensure zero indicators of potential tax evasion.

Step 4: Audit Transaction Commercials and Payment Flows

Procurement teams must evaluate supply agreements critically:

  • Are prices aligned with standard market conditions?

  • Are goods or services within the supplier’s official commercial license scope?

  • Is payment handled electronically? If cash is used, is it strictly within legal thresholds with a documented commercial reason?

  • Are third-party payments or offshore remittances backed by logical commercial explanations?

Step 5: Draft an Internal Governance Policy & Audit Trail

Article 5 of the decision mandates that taxable persons must maintain a documented internal policy identifying who is in charge of implementing, reviewing, and supervising these verification steps. Furthermore, all steps and supporting documents must be systematically archived to satisfy future FTA audits.

Final Thoughts

While transactions under AED 10,000 (provided total yearly volume from that supplier stays under AED 100,000) enjoy exceptions, core B2B operations will need a solid, auditable verification pipeline. Review your vendor portfolios today to hit the ground running by October.

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