UAE Companies Face Stricter Input VAT Due Diligence Rules Under FTA Decision

UAE corporate entities are updating their supply chain governance to comply with Federal Tax Authority Decision No. 13 of 2026 concerning input VAT deduction rules.

The regulations mandate that taxable businesses verify the identity, commercial address, license validity, and commercial rationale of suppliers prior to recovering input tax.

Under the rules, the Federal Tax Authority is empowered to reject input VAT claims under a statutory 'knew or should have known' legal standard if a supply or supplier is tied to tax evasion.

According to Consultancy-me.com, these obligations require finance and procurement teams to revise vendor onboarding processes, perform annual supplier re-audits, and retain verifiable due-diligence documentation.