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Transfer of Business as Going Concern

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This Public Clarification discusses the conditions that have to be met for a transfer to qualify as a transfer of a going concern under Article 7(2) of the Decree-Law.


This VAT public clarification discuss the following issue:

In accordance with the Federal Decree-Law decree on Value Added Tax (the “Decree-Law”), the transfer of whole or an independent part of a business from a person to a taxable person for the purposes of continuing the business that was transferred is not considered to be a supply for VAT purposes.

As a consequence of not being a “supply” for VAT purposes, such transfer of a business, commonly known as a “transfer of business as a going concern” or a “TOGC”, is not subject to VAT. This rule has a compulsory application.

The VAT Public clarification discuss the following points also:

1- Share sale vs assets sale.

2- Sale of assets vs sale of business:

3- Transfer of the whole or an independent part of a business:

4- Requirements for a transfer of going concern: For a transfer not to be treated as a supply for VAT purposes, the following conditions must be met:

a. There must be a transfer of whole or an independent part of a business;

b. The transfer must be made to a taxable person; and

c. The recipient intends to continue the business which was transferred

This Public Clarification issued by the FTA is meant to clarify certain aspects related to the implementation of the Federal Law No 7 of 2017 on Tax Procedures, Federal Decree-Law No 8of 2017 on Value Added Tax and their Executive Regulations.

This Public Clarification states the position of the FTA and neither amends nor seeks to amend any provision of the aforementioned legislation. Therefore, it is effective as of the date of implementation of the relevant legislation, unless stated otherwise.

Disclaimer: Terms and conditions apply for implementing the above, the content of this email shall not be treated as legal statement, we shall not be responsible for any damages caused due to any person his/her treating or interpreting the content of this email. You shall refer to UAE tax law and regulations for complete information or contact us.

You can reach us to fix an appointment to discuss and get clarity on any related information. Mail us at [email protected] or call us @ +971 4 2699 329

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Balaram Vuchidi

Managing Director
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