In accordance with Article 7(2) of the Federal Decree-Law No. (8) Of 2017 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 a business as a going concern” or a “TOGC”, is not subject to VAT. This rule has a compulsory application.
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.
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