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

Goods include compulsory ownership transfers for Consideration, long leases or instalment sales normally ending in ownership, water, energy and Deemed Supplies of Goods.

Who should read this?

Sellers, financiers, asset lessors, utilities and contract reviewers.

Why does it matter?

Contract title is not decisive. A lease can be Goods where ownership substance transfers, changing timing, invoice and value compared with Services.

Compulsory transferInstalment or ownership-ending leaseWater and energy are Goods

Current text

A. A transfer of ownership of Goods or of the right to use them as an owner shall include the following: 1. A compulsory transfer of ownership for Consideration, in accordance with a decision issued by public authorities or any law in force in the Kingdom. 2. A Supply of Goods in accordance with a long-term rental agreement or the sale of the Goods through deferred instalments, provided that the contract includes the transfer of ownership of the Goods to the Customer under normal circumstances, at the latest, when paying the Consideration in full. B. The following Supplies shall be considered as a Supply of Goods: 1. A Supply of water. 2. A Supply of any form of energy, which includes, but is not limited to, electricity and gas, including biogas, coal gas, liquefied petroleum gas, natural gas, oil gas, producer gas, refinery gas, reformed natural gas, tempered liquefied petroleum gas and any mixture of gases, whether used for lighting, heating, cooling, air conditioning or for any other purpose. 3. A Deemed Supply of Goods.

Is this Goods?

  1. 1

    Identify asset and ownership right.

  2. 2

    Test owner-like disposal.

  3. 3

    Read end-of-payment transfer clause.

  4. 4

    Check water, energy or Deemed Supply.

  5. 5

    Link classification to timing and invoice.

Connected provisions

Direct legislative link

Law — Article (5)

Supply of Goods

This Article details the Law category.

Open connected Article
Direct legislative link

Regulations — Article (14)

Special dates

Operating and finance leases differ in timing.

Open connected Article
Thematic link

Regulations — Article (5)

Services

Alternative classification.

Open connected Article

Official guides and tools

Official text

VAT Executive Regulations

Article (3)

Connected Madar tools

Connected Madar tools

Tax Invoice Centre

Check the invoice route and issue deadline, and calculate VAT for a single transaction.

Illustrative example by Madar

Machine instalments with final ownership

A machine delivered under instalments with ownership passing after the last payment enters Goods even if called a lease. A returnable operating lease with retained ownership risks needs different classification.

Questions to help you apply it

  • Ownership passes?
  • When?
  • Finance or operating lease?
  • Timing effect?