Version 3 | May 2026

This Guideline This Guideline is intended for all natural and legal persons carrying on an economic activity and are subject to VAT. This important Guideline provide further clarification regarding the obligations and tax implications related to the transfer of businesses. For guidance on any specific transactions, a request may be submitted to obtain an interpretative decision; or you can the official VATwebsite at zatca.gov.sa, which offers a wide range of tools and information specifically developed to assist persons subject to VAT, including visual guidance materials, all relevant publications, and frequently asked questions (FAQs). 2. Definitions of Key Terms Taxable Person: A person who runs an economic activity independently for generating income, and who is registered for VAT purposes in the Kingdom or is deemed required register for VAT((1)) therein in accordance with the VAT Law and its Implementing Regulations. Economic Activity: An activity carried out continuously and regularly, including commercial, industrial, agricultural, professional or service activities, or any use of tangible or intangible property, and any other similar activity((2)). The term Transfer of an Economic Activity is not defined for the purposes of VAT; however, it will be used in this Guideline to refer to transactions in which a taxable economic activity is transferred from a taxable person to a recipient whether wholly or partly such that it is operable as an economic activity in its own right, and is not treated as a taxable supply where the following conditions are met: 1. The goods and services related to the transferred activity are operable as an independent economic activity and include all tangible and intangible assets necessary for that purpose. 2. The recipient is a taxable person registered with the Authority, or becomes so as a result of the transfer, and undertakes to use the assets, goods, and services in the same economic activity of the supplier. 3. A written agreement exists between the supplier and the recipient stating their intention to treat the transfer as a transfer of an economic activity for the purposes of the Implementing Regulations. 4. The supplier and the recipient notify the Authority of the transfer no later than the end of the month following the date of transfer, using the approved form for that purpose. Further information regarding the transfer of an economic activity can be found in Section 5.2.1 of this Guideline. The Implementing Regulations set out conditions for considering such transfer to be outside the scope of VAT((3)).