Your supplier verification policy: what Article 5 asks for

What the decision requires

Article 5(4) asks you to maintain a documented policy that identifies the persons in charge of implementing, reviewing and supervising the verification procedures, sets out their powers and responsibilities clearly, and is kept where you keep the documents you are required to retain. Article 5(3) adds that the verification steps themselves must be documented, with supporting records, so the FTA can check how you applied them.

A practical outline

A policy for a small or mid-sized business can fit on a few pages. A structure that covers the decision:

1. Purpose and scope — why the policy exists (Article 54(bis) of the VAT Law and Decision No. 13 of 2026) and which entities and purchases it covers.
2. Roles — who implements, reviews and supervises the checks, by role and name, with deputies.
3. When checks happen — new suppliers before the first deduction; recurring suppliers when 12 months have passed since their last verification; every in-scope supply.
4. Thresholds — how you apply the AED 10,000 exception, the AED 100,000 cap and the AED 375,000 extra checks, including whether totals include VAT and how you estimate the next 12 months.
5. Supplier checks — identity, place of business, risk indicators and the extra checks, with the evidence you accept.
6. Supply checks — commercial reason, payment method and route, cash, pricing, licensed activity, goods origin, intermediaries.
7. Escalation — what happens when something does not fit: who decides, and when your tax adviser is involved.
8. Records — where evidence and conclusions are stored, how long, and who has access.
9. Review of the policy — who reviews it and how often.

Implement, review, supervise

• Implement — the person or team doing the checks, often accounts payable or procurement.
• Review — someone other than the implementer who checks the evidence and conclusions, especially for suppliers above AED 375,000 and for anything that did not fit.
• Supervise — a manager or owner who is accountable for the process, approves the policy and decides on escalations.

In a very small company one person may hold more than one role; the policy should then say how a second pair of eyes is arranged for higher-risk cases.

Working with a provider

You can have the checks carried out by a provider — that is the service Next Horizons offers. The policy then names the provider's role (carrying out and documenting the checks), keeps the review and supervision within your business, and says where the provider's reports are kept. The responsibility for deducting input tax stays with you and your tax adviser.

When we verify your suppliers, we ask whether you already have a policy. If you do not have one yet, we record that as an open point in your report so it does not get lost.

Keeping it current

• Review the policy when your purchasing changes — new entities, new categories, large new suppliers.
• Check that the named people are still the right ones.
• Record each review with its date, so the policy shows it is in use.