Transferring the business and VAT

The situation

A transfer of the whole economic activity is outside VAT only if all needed assets move and both parties notify ZATCA within 30 days from the end of the transfer month.

The law

• VAT Implementing Regulations Article 17 (transfer of a going concern): Both parties notify ZATCA within 30 days from the end of the transfer month or the transfer is a taxable supply

What it means for you

If you miss the notice, the transfer can be treated as a taxable supply. Example: assets of SAR 1,000,000 could face SAR 150,000 VAT. The seller must also cancel its VAT registration on a full transfer.

What to do

1. Confirm all assets transfer.
2. File the notification form.
3. Deregister the seller.

Related

• Late VAT payment penalty calculation
• Nil VAT return
• Credit note timing after the 2025 change
• Unpaid supplier invoice after 12 months
• Input VAT on staff entertainment and hotels
• VAT return due date and payment