Government English translation of Decree-Law No. (48) of 2018. The Arabic text published in the Official Gazette remains the legal reference in the event of any discrepancy.
A surrender of all or part of an Economic Activity is not treated as a Supply where it is made to a Taxable Person in Bahrain, whether for Consideration or without Consideration, provided the conditions in the Regulations are met.
Business owners, investors and advisers involved in selling an operating business or transferring an independently operable part of one.
The outside-scope treatment is not automatic. It depends on what is transferred, the VAT status of the parties, continued use of the business and the notification requirements.
Current text
Before treating the transfer as outside scope
- 1
Determine whether the transaction transfers a business capable of continuing, rather than stand-alone assets.
- 2
Confirm the VAT registration position of both the Transferor and the Transferee.
- 3
Confirm that the Transferee will immediately use the transferred elements to carry on the same Economic Activity.
- 4
Check the 30-day deadline and the separate notification required from each party under Article (12) of the Regulations.
Connected provisions
Official guides and tools
Sale of an independently operating branch
A transfer of an operating branch together with the staff, assets and contracts needed to continue its business may qualify, subject to the remaining conditions. A sale of the branch's equipment alone is not enough if the purchaser cannot continue the activity with what was transferred.
Questions to help you apply it
- Can the purchaser continue the activity using the elements transferred?
- Do both parties meet the VAT registration requirements at the transfer date?
- Has each party prepared its own notification for submission within the deadline?