FTA issues three key decisions

1. What are FTA Decisions – applicability and validity

FTA Decisions are binding regulatory instruments issued by Federal Tax Authority (FTA) to implement the UAE tax laws. Each Decision draws its authority from a parent law – the VAT Law, the Tax Procedures Law, the Excise Tax Law or the Corporate Tax Law and it sets out the detailed rules, procedures, timelines and conditions that taxpayers must follow.

A Decision is legally binding on every taxable person falling within its scope from its stated effective date. Unlike a Public Clarification (which is guidance and not binding on the FTA), a Decision carries the full force of law and remains valid until it is amended, replaced or repealed, or until the underlying legislation on which it is based changes.

2. Three key Decisions published by the FTA 

On 20 August 2026, the FTA issued three key decisions. With the exception of Decision No. 13 of 2026, which applies prospectively rom 1st October 2026, the remaining two decisions have retrospective effect and are deemed effective from 30 July 2026.

3. Summary of each Decision

3.1 FTA Decision No. 13 of 2026 – Input Tax Verification (VAT) 

This is the most significant of the three Decisions. Issued under Article 54(bis) of the VAT Law, the Decision strengthens the UAE's anti-tax evasion framework by making input VAT recovery contingent on businesses undertaking reasonable due diligence over their suppliers and the underlying transactions. Where a supply is connected to tax evasion and a business cannot demonstrate that appropriate verification procedures were performed, the FTA may deny the related input VAT recovery on the basis that the business should reasonably have been aware of the associated risk.

What businesses must do:

• Verify the supplier's identity – Emirates ID / passport for individuals; certificate of incorporation and authorised-representative ID for companies. Verify the supplier's actual place of business (electronic check or field visit) and confirm it fits their licensed activity.
• Screen for risk indicators – e.g. supplier changing address or key staff more than twice in 12 months, or transactions disproportionate to their size; keep a documented justification where a flag applies.
• Obtain written bank-account confirmation and review public reviews / media for evasion signals - For suppliers exceeding AED 375,000 (past or expected next 12 months).
• Verify the supply itself – genuine commercial rationale, electronic payment (cash only with documented reason), market-consistent pricing, and authentic origin / ownership of goods.
• Document every step and have a written policy naming who is responsible for the verification process.
• Repeat this exercise every 12 months for current suppliers and every time a new supplier is onboard.
• De-minimis exceptions: the requirement to undertake the checks above may be skipped where a supply is below AED 10,000 (excl. VAT) – but not if total purchases from  a supplier exceed AED 100,000 over 12 months.

3.1 FTA Decision No. 4 of 2026 – Maintaining Accounting Records

• Records may be kept as electronic copies or photocopies, but each must be a complete, identical replica of the original, with all pages in the same order – partial scans are not accepted. 
• Copies must be clear and legible on-screen; ink and paper must not fade over the retention period (black-and-white copies of colour originals are acceptable if still legible). 
• The FTA must be able to access records on request – including being provided encryption keys / passwords and access to the system where records are stored. 
• Record-keeping may be outsourced to a third party, but full legal responsibility remains with the taxable person.

3.3 FTA Decision No. 7 of 2026 – Disposal of Seized & Abandoned Goods 

• Applies where the FTA seizes goods, or goods are abandoned, and they are perishable, prone to shortage / leakage, or a safety hazard.
• The FTA may sell such goods at public auction – but only where the owner fails to reclaim them after settling all tax, penalties and costs, or waives their rights.
• Sale proceeds are applied in strict order: (1) sale / storage costs, (2) tax due, (3) penalties due, (4) any balance credited to the owner's tax account (or retained by the FTA if the owner waived recovery).
• Goods tied to investigations or court proceedings require prosecutor / court approval before sale. 

How Grant Thornton can help

These Decisions – and Decision No. 13 in particular – move compliance from a documentation exercise to an active control environment. The window to prepare for the input-tax verification rules is short, and the cost of getting it wrong is denied VAT recovery.

Grant Thornton UAE can help you assess the impact of each Decision, design and implement a supplier and supply verification framework aligned to Decision No. 13, review your record-keeping and system-access controls against Decision No. 4, and build the supporting policies, checklists and documentation the FTA now expects. We can also train your finance and procurement teams so these checks become an embedded, audit-ready part of your day-to-day process.

Reach out to your Grant Thornton UAE tax contact for a focused walkthrough of how these Decisions affect your business and a practical roadmap to implement them ahead of the effective dates. 

^{This alert is intended for general information only and does not constitute tax, legal or accounting advice. The Decisions referenced are based on unofficial English translations; the official Arabic text prevails. Specific advice should be obtained based on the facts and circumstances of each business.}