Supplier verification under the UAE's new VAT rules
The UAE's new rules put the burden on the buyer to show it checked its suppliers before recovering input VAT. Essence puts each supplier's status in front of the payment, and keeps a record of every decision.
A valid tax invoice used to be enough. Under the UAE's new rules on recovering input VAT, it is not. A business now has to be able to show that it checked the supplier, and the supply, before it claimed the tax back. If a supply turns out to be linked to evasion somewhere in the chain, the Federal Tax Authority can refuse the claim from a buyer who knew, or should have known.
So the question for a finance team changes. It is no longer only "did we check this supplier?" It is "can we prove it, for every supplier we paid?"
Where supplier checks usually live
Many organisations already check their suppliers in some form. The results end up scattered: a certificate in someone's inbox, a note on the vendor record, a spreadsheet of insurance renewal dates. None of it is connected to the moment that matters, which is when a payment is released. A supplier whose licence lapsed last month can still be paid this month, because nothing stands between the lapsed licence and the payment run.
A check at the point of payment
Essence's supplier compliance gate closes that gap. Before your ERP or accounts payable system raises a purchase order or releases a payment, it asks Essence one question: is this supplier clear to pay?
If the answer is no, it does not come back as a bare refusal. It lists what is blocking the supplier and why, so your team knows exactly what to fix. Eight conditions block a supplier:
- suspended;
- terminated;
- onboarding not finished;
- rated critical risk;
- a credential missing or out of date;
- insurance missing or out of date;
- an expired data processing agreement;
- flagged by the regular check for expired documents.
Your systems can also subscribe to changes, so they hear the moment a supplier's status moves rather than finding out at the next payment run.
Expiry dates that enforce themselves
Credentials and insurance are held with their dates. When a document expires, the supplier's status changes with it, and the next request to pay comes back blocked. Nobody has to remember a renewal date. A lapsed certificate is caught before the money moves, not found months later during an audit.
A record you can put in front of an auditor
The rules expect records, not good intentions. Every decision about a supplier, whether to suspend, reinstate, escalate, offboard or terminate, is recorded with who made it and when.
Those records sit in an audit trail designed to show it has not been changed: any single entry can be checked against the full recorded history. That is a different thing to hand an auditor from a spreadsheet that anyone with access could have edited.
What stays with your team
Judgement stays where it belongs. Whether a purchase made commercial sense, whether a price was reasonable, whether a warning sign needs a closer look: those are decisions for your finance and procurement people. The FTA's own text, and your tax adviser, decide exactly what the rules require of you.
What Essence changes is what happens to those decisions afterwards. They reach the system that releases the money, and they are written down in a form you can stand behind. Since our July release, an ERP can ask the gate before every payment.
If the new rules have your team rebuilding its supplier file, we would be glad to show you how the gate and its record fit alongside the systems you already run.
Published 24 September 2026