The sale of a business as a going concern is not consideredto constitute a supply for VAT purposes if the prescribed conditions are met.

The prescribed conditions are:

• the sale must cover the whole business or at least aseparate functional business operation and thus the relief does not apply to a supply of standalone assets and/or inventory only;
• the assets transferred must be used by the transferee in carrying on the same kind of business as that of the transferor;
• the transferee must be a taxable person registered for VAT purposes under Article 10 of the Value Added Tax Act; and
• the transfer must be recorded in the records of the transferor indicating the VAT identification number of the transferee.

Where the transferee is not registered for VAT purposes under Article 10 of Value Added Tax Act, the Director-General (VAT) may authorise the application of this VAT relief, subject to the additional condition that the transferor should not have benefitted from a credit of input VAT on the acquisition and the accumulation of the assets being transferred.