The Federal Tax Authority (FTA) has issued Decision No. 13 of 2026, establishing measures for verifying suppliers and the goods and services received from them. The decision is linked to the new provision in the VAT Law — Article 54 bis.
The key principle: a tax invoice alone may not be sufficient.
If a transaction is connected to a tax evasion chain and the purchaser knew or should have known about it, the FTA may refuse the recovery or deduction of input VAT.
Businesses will need to pay greater attention to verifying:
The FTA has also identified specific risk indicators, including changes of address, changes in key personnel, and transactions that are disproportionate to the size and business history of the company.
The key principle: a tax invoice alone may not be sufficient.
If a transaction is connected to a tax evasion chain and the purchaser knew or should have known about it, the FTA may refuse the recovery or deduction of input VAT.
Businesses will need to pay greater attention to verifying:
- The supplier’s existence and legal status;
- Its registration and business activities;
- The nature and economic substance of the transaction;
- Unusual changes within the supplier company;
- Documents and circumstances relating to the specific transaction.
The FTA has also identified specific risk indicators, including changes of address, changes in key personnel, and transactions that are disproportionate to the size and business history of the company.