When a business submits a VAT refund claim, its finance team will usually be able to find the relevant invoices and payment records. What can be harder, particularly several months later, is explaining the circumstances behind a purchase. Who chose the supplier? What work was actually done? Was there anything unusual about the arrangement and who looked into it?
These are straightforward questions, but the answers are not always kept in one place.
The invoice may be in the accounting system, the agreement in a shared folder and the explanation for a change in payment details in someone’s e-mail. If the FTA asks for further information during a return check or refund review, bringing it all together can take far longer than expected.
Getting Your VAT Records Right
Recent changes to UAE VAT rules make this a good time for businesses to look at how they manage that information. Amendments effective from January 2026 strengthened the FTA’s powers concerning input tax linked to tax evasion. FTA Decision No. 13 of 2026, effective from 1st October 2026, sets out requirements for verifying suppliers and supplies before input tax is deducted, as well as documenting the procedures used.
For finance leaders, the practical question is whether those checks fit into the way the business already buys, approves and pays for things.
What the Invoice Cannot Tell You
An invoice and proof of payment are important records. They are not always enough to explain a transaction if questions arise about the supplier or the supply.
Suppose a company appoints a consultant for a short project. The invoice is correctly addressed and has been paid, but the person who commissioned the work has since left. Can the business find the agreed scope? Is there evidence of what the consultant delivered? Does the finance team know why the engagement was needed and who approved it?
In most cases, the answers exist somewhere. The problem is that they may never have been linked to the accounting record. That becomes especially difficult when a business is trying to respond to a question within a deadline while continuing to run its normal finance operations.
A reviewer may need to understand more than whether an invoice was issued and paid. The better approach is to keep a straightforward record of the purpose and outcome of a purchase at the time, rather than ask employees to back-track later.
Give Supplier Checks an Owner
Many businesses already collect documents when setting-up a new supplier. But collecting a trade licence and bank details is not quite the same as checking whether the supplier’s details make sense for the proposed work.
Decision No. 13 sets out supplier verification measures, including checks relating to identity, representation and business activity. It also provides for renewed verification where a supplier has not been checked during the preceding 12 months and additional measures in certain higher-value circumstances.
This does not mean every supplier requires detailed checks. It does mean the business should have a consistent way to carry out and record the relevant checks. If information does not match, someone should ask why. If a supplier changes its payment instructions, the business should know who confirms the change and how. If concerns are resolved, that decision should be recorded.
Clear ownership matters – procurement may set-up the supplier, an operations team may agree the work and finance may receive the invoice. Each has part of the picture, whereas a clear process allows them to share the information that matters without asking everyone to repeat the same checks.
Look at the Purchase
Even where a supplier is well known to the business, an individual purchase may need attention. An invoice may cover a service that falls outside the usual relationship or the price, payment terms and delivery arrangements may differ from what was expected.
This is where a proportionate review helps. Most purchases can follow an established approval route.
High-risk or unusual transactions should be reviewed consistently, with any questions resolved before the input VAT is included in a return. The supporting record might be a contract, purchase order, delivery confirmation or correspondence. The point is to be able to show what the business bought and why.
The new decision addresses verification of the supply as well as the supplier. That is an important distinction as approving a supplier last year should not mean every invoice received this year goes without further assessment.
Finance teams can test how well this works by selecting a small number of transactions before filing a return. If another member of the team cannot understand a purchase without calling the person who arranged it, then there is likely a gap in the process worth fixing.
Where Digital Processes Help
This work can become burdensome if it depends on people remembering to save documents in the right folder or forward e-mails to finance. Digital workflows can make the routine steps easier. They can help teams request supplier information in a consistent format, keep documents with the relevant transaction, track when a review is due and identify items needing attention before a return is submitted or a refund is claimed.
They also help when the FTA asks a question. A team that can locate the supplier checks, approval, invoice and evidence of delivery together is in a better position than one searching across files, folders and inboxes.
Technology does not remove the need for judgement. A system can show that a document is missing or that an invoice meets a review threshold. An experienced person still needs to consider whether the transaction makes commercial sense and whether the available evidence supports the VAT treatment.
No process will prevent every question, but a practical process makes it less likely that an entirely reasonable transaction becomes difficult to explain simply because its records are scattered.
A useful place to start is with a few recent purchases. Follow each one from supplier set-up through to approval, delivery, payment and VAT reporting. See what is easy to find, what requires an e-mail search and what nobody can easily explain. Those findings will usually show where a small change to responsibilities or record-keeping could make the biggest difference.
This is a more manageable exercise to do now, as part of normal business, rather than when a refund claim is already under review.
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