VAT in the UAE: New October regulation will change how you manage compliance

Federal Tax Authority Decision No. 13 of 2026, set to take effect on October 1, 2026, will fundamentally alter how businesses handle VAT compliance. This will impact supplier invoicing and carries significant financial consequences for non-compliance. Two types of suppliers exist: natural persons registered for VAT and licensed companies.

For natural persons, verification includes confirming their identity through a passport or Emirates ID, and for licensed companies, it involves verifying their legal incorporation through a certificate of incorporation. The names and addresses on the trade licence must be cross-checked, and employees' information should be updated promptly to maintain accuracy.

Additionally, verifying the identity of the person representing the supplier is crucial, implying someone authorized to contract on their behalf. Risk assessment for each supplier is mandatory, involving verifying their business location, ensuring premises suitability, and noting any significant changes. Verification of a bank account for suppliers with annual purchases exceeding the VAT registration threshold is also required, along with a justified reason for payments made to non-UAE located banks.

Documentation of fair market prices, appropriate trade licence, and title to goods and services are essential. A designated internal manager should oversee these compliance tasks, with purchases below Dh10,000 before VAT excluded unless they total Dh100,000 or more in a 12-month period.