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UAE Introduces Mandatory Supplier Verification for VAT Input Tax Recovery

Starting October 1, UAE businesses must verify suppliers and transactions to qualify for VAT input tax recovery under Federal Tax Authority rules. Companies are required to verify first-time vendors and re-verify existing partners annually. Verification covers corporate records, physical locations, authorized representatives, and documentation of commercial purpose.

Published Source: Arabian Business
Issuing authority
Federal Tax Authority
Jurisdiction
United Arab Emirates
Stage
Final rule
Emirati businessman and Chinese scientist inspecting hydroponic crops in a high-tech greenhouse
Photo: UAE-China Chamber of Commerce

Starting October 1, UAE businesses will face new Value Added Tax (VAT) compliance requirements that make supplier and transaction verification mandatory for claiming input tax recovery, according to Arabian Business.

Under rules from the Federal Tax Authority, companies must verify first-time suppliers and conduct re-verifications for existing partners if no review has taken place within the preceding 12 months.

The required verification process includes confirming incorporation records, establishing physical business locations, and authenticating authorized representatives. Furthermore, businesses must document a genuine commercial purpose for transactions and analyze supplier involvement in the supply chain prior to claiming deductions.

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