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 new legal Person replacing a previous legal form succeeds to its Tax rights, duties, due Tax and administrative fines; multiple successors are jointly liable. On a business transfer, transferor and transferee are jointly liable for due Tax and fines in the transfer year and non-time-barred prior amounts, subject to Law Article 11. General partners are jointly liable for company obligations.

Who should read this?

Entities changing form, merging or dividing; business sellers and buyers; general partners and deal teams.

Why does it matter?

A change of name, form or owner does not automatically erase Tax history. Due diligence must identify open periods, fines, assessments and Returns; contractual indemnities do not bind the NBR's statutory recovery rights.

Successor takes earlier obligationsBusiness-transfer joint liabilityGeneral-partner joint liability

Current text

A. Where the legal status of a legal Person has changed, the new legal Person shall replace the previous legal Person in all his previous and new rights and duties towards the Bureau including the payment of Tax due and any administrative fines due. Where the legal Person is replaced by more than one legal Person, all legal Persons shall be jointly liable for the payment of Tax due and administrative fines. B. Subject to the provisions of Article 11 of the Law, where the Taxable Person surrenders his business to another Person, the two parties shall be jointly liable for the payment of Tax due and any administrative fines during the year in which the surrender occurs, and are jointly liable for any amounts due from previous years that have not expired due to the statute of limitations. C. Partners shall be jointly liable for Taxes, administrative fines and other obligations imposed on the company.

Liability review before change or transfer

  1. 1

    Classify change of form, merger, split or business transfer.

  2. 2

    List open periods, Tax and fines before the event.

  3. 3

    Identify transfer-year and non-time-barred prior amounts.

  4. 4

    Apply Law Article 11 without assuming it removes liability.

  5. 5

    Identify every jointly liable Person.

  6. 6

    Document contractual protections without treating them as statutory release.

Connected provisions

Direct legislative link

Law — Article (11)

Transfer of Economic Activity

Article 99 preserves joint liability subject to the Law's transfer treatment.

Open connected Article

Official guides and tools

Official text

VAT Executive Regulations

Article (99)

Connected Madar tools

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

December transfer with older Tax due

A December business transfer has unpaid Tax from that year and a prior-year amount that is not time-barred. The buyer should not assume these remain only the seller's problem; joint liability for both categories must be tested.

Questions to help you apply it

  • Which legal change?
  • Who succeeded the old Person?
  • Transfer-year amounts?
  • Which earlier amounts remain live?
  • Who is jointly liable?