1.1 The Value Added Tax Consolidation Act 2010 (the VAT Act) provides that a transfer of ownership of goods, being the transfer to an accountable person of a totality of the assets or part thereof, of a business, even if that business or part thereof had ceased trading, where those transferred assets constitute an undertaking or part of an undertaking capable of being operated on an independent basis, is deemed not to be a supply for VAT purposes. Similar provisions apply as regards the transfer of goodwill or other intangible assets between accountable persons.
1.2 These provisions are important trade facilitation measures aimed at reducing compliance costs for traders involved in this type of transaction. However, traders are advised that when they are involved in a transfer of this type, particularly as an acquirer of a totality of assets or part thereof of a business which might constitute an undertaking or part thereof capable of being operated on an independent basis, they should, in cases of doubt, check with their local Revenue District office before paying any VAT invoiced by the vendor in such circumstances. Where such a transfer is involved it is important to note that any VAT paid by a purchaser to a vendor in error will not be deductible as no supply is deemed to have taken place.
1.3 This leaflet does not refer to the transfer of a business by means of the transfer of shares in a company. Such a supply is exempt from VAT in accordance with paragraph 6(1) of Schedule 1 to the VAT Consolidation Act.