Input VAT denied for a fake supplier
The FTA says my supplier was part of a VAT fraud chain. Can they deny my input VAT?
The situation
From 1 January 2026, input VAT can be denied if the supply was part of an evasion chain and you knew or should have known. You are treated as aware if you did not verify the supply properly.
The law
- Art 54, Federal Decree-Law 8 of 2017 as amended by Federal Decree-Law 16 of 2025: Denial of input tax linked to tax evasion
What it means for you
Your defence is evidence of checks: supplier TRN verified on the FTA site, trade licence, delivery proof, bank payments to the supplier's own account, and market prices. Example: a trader buying phones far below market from a new supplier with cash payments is at high risk. Build a supplier onboarding checklist.
What to do
- Collect proof of delivery and payment.
- Show TRN and licence checks done at the time.
- Reply to the FTA within the deadline.
- Start TRN checks for all new suppliers.
We can do this for youVAT return filing (VAT201) on EmaraTax: output and input VAT, reverse charge, corrections and payment: AED 850