English text status

English translation published by the NBR in its bilingual Regulations file (marked unofficial). The Arabic text published in the Official Gazette remains the legal reference in the event of any discrepancy.

Practical summary

A whole activity or independently operating part is outside taxable Supply where transferred elements permit continuation, seller is registered, purchaser is registered or becomes liable, and purchaser uses them immediately in Economic Activity. Each party must independently notify the NBR within 30 days.

Who should read this?

Going-concern sellers, buyers, deal, accounting and legal teams.

Why does it matter?

A group of assets is insufficient without a continuing activity. Both notices are material: missing formal notice makes the transfer a Taxable Supply under the Article.

Continuing activityBoth registration conditionsTwo independent 30-day notices

Current text

A. A Taxable Person's transfer of all or part of its Economic Activity shall not be treated as a Supply where all of the following conditions are met: 1. The transfer includes the business elements that enable the transferee to carry on all or part of the transferred Economic Activity. 2. The transferor of the Economic Activity is registered for VAT purposes in the Kingdom. 3. The transferee is registered for VAT purposes in the Kingdom or becomes required to register as a result of the transfer. 4. Immediately after the transfer, the transferee uses those Goods and Services to carry on the same Economic Activity. B. The business elements referred to in Paragraph A(1) of this Article include tangible property, including fixed assets, rights and intangible assets, as well as the liabilities of the Economic Activity. C. The transferor and the transferee shall each independently notify the NBR of the transfer, using the form prepared by the NBR for this purpose, within thirty days from the date of transfer. If formal notification is not submitted to the NBR within that period, the transfer shall not be recognised for this purpose and shall be treated as a Taxable Supply.

Going-concern test

  1. 1

    Map assets, rights and liabilities.

  2. 2

    Prove whole or independent continuing activity.

  3. 3

    Check seller and purchaser registration.

  4. 4

    Evidence immediate Economic Activity use.

  5. 5

    Seller files own notice in 30 days.

  6. 6

    Purchaser files own notice.

  7. 7

    If any condition fails, calculate taxable effect.

Connected provisions

Direct legislative link

Law — Article (11)

Activity transfer

The Law creates treatment and this Article supplies conditions.

Open connected Article
Direct legislative link

Regulations — Article (99)

Joint liability

Outside-Supply treatment does not remove transfer-year and live prior liability.

Open connected Article

Official guides and tools

Official text

VAT Executive Regulations

Article (12)

Official form

VAT Forms

Transfer of a Going Concern

Connected Madar tools

Connected Madar tools

VAT Registration Centre

Check registration thresholds using your inputs, with mandatory, voluntary and uncertain cases distinguished.

Connected Madar tools

Audit and Assessment Centre

Identify the audit or assessment-review stage and prepare an action list and report from your answers.

Illustrative example by Madar

Operating shop sold with all elements

Brand, stock, equipment, lease and staff let the buyer continue immediately; both registration tests and separate 30-day notices support the treatment. Stock alone does not prove a continuing activity.

Questions to help you apply it

  • Operating activity transferred?
  • Registration status?
  • Immediate use?
  • Each party notified?