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The Decision was issued on 22 July 2026 and published on the FTA portal on 20 August 2026. The framework is increasingly described in market commentary as Know Your Supplier, or KYS. That is useful shorthand, but KYS is not a defined term in the Decision. The legal requirements cover verification of both the supplier and each taxable supply.

For businesses, the practical change is that a tax invoice will not be the only evidence supporting input tax recovery. Procurement, finance, accounts payable and tax teams will need a shared process that completes and records the checks before the deduction is claimed.

What the Decision requires

When dealing with a supplier for the first time, or on recurrent dealings if the supplier has not been verified in the previous 12 months, the taxable person must check the supplier's identity and legal existence, authorised representative, address and actual place of business. For a natural person, this includes valid identification and an in-person or virtual meeting before the supply. For a legal person, incorporation must be checked through official databases or a certificate of incorporation, together with the identity of the authorised representative.

Businesses must also assess supplier risk. The Decision identifies an address or key employee changing more than twice in the previous 12 months, and transactions that are disproportionate or unexpected in volume, value or nature compared with the supplier's size and history. Where an indicator applies, the business must retain a clear, evidence-based explanation that can be provided to the FTA on request.

Each taxable supply also needs review. Businesses should confirm a genuine commercial reason, commercially justifiable payment terms, appropriate pricing and margins, alignment with the supplier's ordinary or licensed activities and, for goods, authenticity, origin, ownership or the supplier's right to dispose of them. Unusual payment routes, intermediaries and cash payments require a documented commercial explanation.

The verification steps and supporting records must be retained. A written policy must also identify who implements, reviews and supervises the process, with clear responsibilities and authority.

A practical evidence file

The Decision does not prescribe one universal document pack. Depending on the supplier, transaction and risk, businesses may consider keeping the following practical evidence. The file should be proportionate to the facts and refreshed when relevant circumstances change:

• A valid trade licence or certificate of incorporation, together with evidence from an official database where available, to support legal existence and licensed activities.
• Valid identification for the supplier or authorised representative, evidence of that person's authority and, for a natural person, evidence of the required meeting.
• FTA TRN verification and a VAT registration certificate, where applicable, to support the supplier's VAT status when VAT is charged.
• A contract, quotation, purchase order, invoice, delivery record or acceptance evidence showing the nature and commercial purpose of the engagement.
• Address and place-of-business evidence, plus bank payment instructions that match the supplier. An MOA, ownership document or UBO and shareholder details may be useful where they resolve a specific ownership, authority or activity question, but should not be treated as routine requirements in every case.

Enhanced review for larger supplier relationships

Where aggregate supplies received from a supplier exceed AED 375,000 over the previous 12 months, or are expected to exceed that amount over the next 12 months, the Decision requires additional evidence. The business must obtain written confirmation from an authorised UAE bank that the supplier has a bank account, without relevant reservations or conditions, and review reliable public reviews and media coverage for indicators of suspected tax evasion. The confirmation need not be addressed to the recipient. Bank details shown on an invoice do not replace it.

Businesses should monitor the threshold by supplier rather than by invoice and record whether the relationship remains commercially consistent in purpose, pricing and payment arrangements.

Different supplier types and the limited exception

For government entities, regulated utilities, banks and similar suppliers, official websites and public registers may be relevant sources of evidence for certain verification requirements. An MOA or UBO request may be irrelevant. The business should still document the verification it relied on and apply the supply-level checks because the Decision does not provide a category-wide exemption for established or public-sector suppliers.

Article 6 permits the checks to be disregarded where consideration, excluding VAT, is less than AED 10,000. That exception is unavailable if total supplies from the same supplier exceed AED 100,000 over the previous 12 months or are expected to exceed that amount over the next 12 months. Low-value invoices should therefore be assessed in the context of the full supplier relationship.

What businesses should do now

Before 1 October, businesses should update supplier onboarding, introduce a 12-month re-verification control, monitor the AED 375,000 threshold, add transaction-level checks and assign responsibility across procurement, finance and tax. Teams should also record any exception used and the supporting calculation. The evidence should be stored with the VAT records in a form that can be provided to the FTA.

Businesses that can show what was checked, when the review took place and who approved it will be better placed to support their input tax position under the advancing compliance framework.

Further reading

• Federal Tax Authority VAT legislation portal
• WellTax UAE Tax Framework guide

Written by Keziah Nicole Dela Cruz, CPA, Senior Accountant and FTA Tax Agent, WellTax.