Sets recognition and carrying-value rules for transfers, with exceptions for reorganisations and specified non-arm's-length events.
What should you do now?Classify the transaction as an ordinary transfer or reorganisation, then document carrying value and recognised gain.
What does the official Article provide?
The official source is Arabic. This English commentary is explanatory and is not presented as an official translation.
Sets recognition and carrying-value rules for transfers, with exceptions for reorganisations and specified non-arm's-length events.
This is a verified summary rather than a verbatim reproduction. Consult the official Arabic text, the Law and later decisions before making a final determination.
What does the Article mean in plain language?
Ordinarily the transferor includes the disposal result and the acquirer uses the appropriate carrying value. A qualifying reorganisation uses continuity treatment, excluding the transferor's result and carrying over its basis, with separate treatment for non-qualifying gains or losses. Test consideration, tax treatment and basis continuity, including the Bahrain-acquirer provision. Paragraph G permits an election for tax-basis fair-value adjustments with immediate or five-year recognition; leaving the group accelerates the remainder. A contract's reorganisation label is insufficient.
M&A, restructuring, legal, tax and consolidation teams.
Classify the transaction as an ordinary transfer or reorganisation, then document carrying value and recognised gain.
Excluding the disposal gain while stepping up the acquirer's basis without authority.
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Is this Article enough on its own?
Usually not. Read it with the connected Law Article, definitions, any effective election and current NBR guidance, especially for an amount or deadline.
Does NBR guidance replace the Regulations?
No. Guidance explains application and supports procedures and examples, but current legislation and decisions prevail in case of inconsistency.