UAE - FTA publishes VAT Public Clarification VATP015 on Transfer of a Business as a Going Concern

This Public Clarification discusses the conditions that have to be met for a transfer to qualify as a    transfer of a business going concern (TOGC)  under Article 7(2) of the Decree-Law No. (8) of 2017 on Value Added Tax. A “transfer of business as a going concern” or a “TOGC” is referred to as a situation wherein whole or an independent part of a business is transferred from a person to a taxable person for the purposes of continuing the business. However, this transfer is not considered to be a supply for VAT purposes .

The FTA states that  transfer of business as a going concern is a type of an asset sale, not a share sale. Further for a transfer “not”  to be treated as a supply for VAT purposes, the following conditions must be met to qualify as TOGC:

• There must be a transfer of a whole or an independent part of a business;
• The transfer must be made to a taxable person; 
• The recipient intends to continue the business which was transferred.

Link: VAT Public Clarification VATP015  on Transfer of a Business as a Going Concern