FTA VATP048: When Decision 13 Input VAT Checks Actually Apply

On 11 November 2026 the Federal Tax Authority published VAT Public Clarification VATP048, Verification of the Validity and Integrity of the Supplies before Deduction of Input Tax, listed that day on its VAT guides and references page. The clarification PDF is guidance on FTA Decision No. 13 of 2026 (issued 22 July 2026, effective 1 October 2026) and Article 54(bis)(2) of the VAT Law. It states the FTA’s position and does not amend the law, the VAT Executive Regulation, or Decision 13.

The change is the scope. VATP048 says Decision 13 applies only where the FTA has established that Tax Evasion occurred. Taxable persons are not required to apply the measures to every supply, but building them into normal processes gives documentary evidence. If you were not actually aware of the evasion and you prove you complied with Decision 13, the FTA will not treat you as having “should have been aware”. The burden of proving tax evasion sits with the FTA under Article 51 of the Tax Procedures Law (Federal Decree-Law No. 28 of 2022). Background on the original rules is in our post on TRN verification and the 2026 supplier checks.

What does “should have been aware” mean now?

Article 54(bis)(2) lets the FTA refuse recoverable input tax where a supply, or a chain of supplies, is related to Tax Evasion and, on the circumstances, the taxable person should have been aware of that link. Decision 13 is the checklist inside that test, not a separate hurdle on every VAT return. Identity still includes matching the supplier to official records and the Tax Registration Number. Format-check a number on the TRN verification tool, then confirm the registered legal name on the FTA lookup.

Document each verification step and keep supporting records so the FTA can test whether the checks were done (Article 5(3)). Keep a documented policy that names who implements, reviews and supervises the procedures, and states their powers and responsibilities (Article 5(4)). Re-verify a supplier the first time you deal with them, and again if they have not been verified in the previous 12 months (Articles 3(1) and 5(1)).

What do the FTA’s worked examples show?

Example 1: a boutique opening a new branch found a curtain specialist through social media ads and dealt with them only on WhatsApp, without verifying identity. The specialist charged AED 10,000 plus AED 500 VAT for measuring, tailoring and installing fitting-room curtains. If that supply is later tied to tax evasion, the boutique is treated as “should have been aware” for skipping Article 3(1).

Example 4: a bakery contracted a furniture manufacturer for AED 60,000 inclusive of VAT, billed as three invoices of AED 20,000 from different companies, each with different foreign bank account details. The manufacturer called this convenient; the bakery did not ask further. If evasion is established, the bakery is “should have been aware” unless it kept a reasonable commercial explanation for third parties in the payment chain, or for payments to accounts outside the supplier’s country of incorporation (Article 4(2)).

Example 6: a restaurant expanding its site was offered extra shishas by a newly established wholesaler. The trade licence listed management consulting, IT advisory and marketing management. The shisha supply sat outside those licensed activities (Article 4(3)(b)), so the restaurant did not buy.

Which AED thresholds still apply?

VATP048 restates Decision 13. The amounts are unchanged.

The AED 10,000 test is “less than” that amount, excluding VAT (Article 6(1)). Once total supplies from the same supplier exceed AED 100,000 excluding VAT over the previous 12 months, or are expected to exceed that over the next 12 months, Article 6(2) switches the exception off. Article 3(4) uses the same 12-month window for the AED 375,000 tests. The bank confirmation must have no relevant reservations and does not have to be addressed to you.

Keep the policy, check records and invoices with the period they belong to, so input tax on the VAT return you file traces to a named reviewer.

FAQ

Does Decision 13 now apply to every purchase?

No. VATP048 says it applies only where the FTA has established that Tax Evasion occurred. You are not required to run the measures on every supply. A documented Decision 13 process is still evidence that you should not be treated as “should have been aware”.

Who has to prove tax evasion?

Article 51 of the Tax Procedures Law: the taxable person proves the accuracy of the tax return; the FTA proves tax evasion. VATP048 cites that split.

What if you did the checks and evasion is found later?

Example 8: if you complied with Decision 13, kept the evidence, were not a party to the evasion and did not know it had occurred, the FTA accepts that you were not aware and were not expected to be aware. Ordinary input tax recovery rules apply.

How often must a supplier be re-verified?

On first dealing, and again if they have not been verified in the previous 12 months. Risk indicators (address or key-employee changes more than twice in 12 months, or transactions that do not fit the supplier’s size and history) still need a clear, justified explanation on file.

Sources

• FTA, VAT Public Clarification VATP048 (PDF), issue date 11 November 2026
• FTA, VAT guides and references (VATP048 listing)
• FTA Decision No. 13 of 2026 (PDF)

This post is for general information and does not constitute tax or legal advice. For how the rules apply to your specific situation, consult a qualified UAE tax adviser. Naqood is an FTA-accredited accounting platform for UAE businesses.