17 July 2026 · Scope
What Transfers Qualify
Article 27 of Federal Decree-Law No. 47 of 2022 gives relief for the transfer of a whole business, or an independent part of a business capable of separate operation, in the course of a merger, spin-off or other reorganisation — the transfer happens at tax written-down value, so no gain or loss arises. It only covers business-level transfers: moving a whole trading operation or a self-contained division. A transfer of isolated assets that is not itself a business, or an independently operable part of one, falls outside Article 27 — that is typically Article 26 Qualifying Group Relief territory instead, or simply a taxable disposal at market value if no relief applies. The scope test is assessed transaction by transaction, so a group can use Article 27 for one restructuring and Article 26 for another within the same year.
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Business-level transfers
It is about businesses, not stray assets. The relief tests the substance of what is moving — a self-contained operation with its own assets, liabilities, staff and revenue stream — not the label on the transfer agreement. A single trading company transferring itself wholesale into a new holding structure, two operating companies merging into one, or a division being spun off into its own legal entity are the classic Article 27 fact patterns.
- Transfer of a whole business.
- Transfer of an independent, separable part.
- In a merger, spin-off or reorganisation.
- On a no gain / no loss basis.
- Mergers between two operating companies.
- The part must be capable of running on its own, with its own assets, liabilities and revenue.
What Article 27 is not for
Some transfers need a different relief. Article 27 was built for restructuring businesses, not for tidying up a balance sheet, so a transaction that does not meet its scope test simply does not get the no gain / no loss treatment under this article — even if it happens alongside a genuine reorganisation.
- Isolated assets that are not a business.
- Transfers to exempt persons or QFZPs.
- Transfers lacking commercial substance.
- These may fall under Article 26 or be taxable.
- A single warehouse, licence or receivable moved on its own — not a business.
- A transfer motivated mainly by tax planning, without commercial substance.
What an independent part looks like in practice
Consider a Dubai logistics group that houses freight forwarding and a separate warehousing division under one company. Spinning the warehousing division into its own entity qualifies as transferring an independent part, because it has its own contracts, staff and revenue and could trade on a standalone basis. Moving only the warehouse building itself, without the operating contracts and staff, would not — that is an asset transfer, not a business transfer, and belongs under Article 26 or as a taxable sale. The FTA looks at operational substance, not internal labelling — a division formally called a business unit in your management accounts still needs its own contracts, staff and revenue to pass the independent-part test.
- Ask whether the part could be sold today as a going concern.
- A division with its own P&L, staff and customer contracts usually qualifies.
- A single asset stripped out of a business usually does not.
- Document the operational substance of the part being transferred, not just its balance-sheet value.
Scoping mistakes that cost the relief
The most common error is treating Article 27 as a general-purpose relief for any group reorganisation. It only applies to whole-business or independent-part transfers; asset shuffles, licence transfers and portfolio rebalancing inside a group usually need Article 26 Qualifying Group Relief instead, or are simply taxable. Getting the scope test wrong at the planning stage, before the transfer completes, is far cheaper to fix than discovering it after filing.
- Assuming any group restructuring automatically qualifies.
- Confusing an asset transfer with a business transfer.
- Not testing whether the independent part could genuinely stand alone.
- Leaving the scope analysis until after the transfer has completed.
- A business unit label in management accounts does not itself prove independent-part status.
Related guides
Frequently Asked Questions
For scoping your transaction against Article 27 before you sign anything.
Does moving one asset qualify?
Not under Article 27, which covers a whole business or an independent, separately-operable part; a single asset moved on its own typically falls under Article 26 Qualifying Group Relief instead, if a 75%+ ownership link exists, or is simply a taxable transfer if it does not.
What is an independent part of a business?
A part capable of operating separately as a going concern on its own — with its own assets, liabilities, staff and revenue stream, not merely a segment of the accounts. The practical test is whether that part could be sold or run independently the day after the transfer.
Are spin-offs covered?
Yes. Spin-offs and other reorganisations that transfer a business or an independent part — including splitting one company into two, or merging two operating companies into one — can qualify for Article 27 relief provided the other conditions are also met.
What is Article 27 legally based on?
Article 27 of Federal Decree-Law No. 47 of 2022, the UAE corporate tax law, with further detail in the FTA's Business Restructuring Relief Guide (CTGBRR1, April 2024).
Can a mainland company transfer part of its business to a free zone entity under Article 27?
No. Neither party to an Article 27 transfer may be a Qualifying Free Zone Person, so a transfer into or out of a QFZP cannot use this relief, regardless of whether the underlying transfer is otherwise a genuine business transfer.
What happens if my transfer does not qualify under Article 27?
It is treated as a normal transfer at market value, which can trigger a taxable gain at the UAE's 9% corporate tax rate. Depending on the structure, Article 26 Qualifying Group Relief may still apply if there is a 75%+ common-ownership link between the parties.
Can the scope of a transfer change part-way through a restructuring?
Yes, and it happens more often than expected — a deal planned as a whole-business transfer can be renegotiated into an asset carve-out, or vice versa, which changes whether Article 27 or Article 26 applies. Re-test the scope whenever the transaction structure changes materially, not just at the outset.
Can Exiloz scope our deal?
Yes. We review the transaction against the Article 27 scope test — whole business or independent part versus stray assets — before you sign, and confirm whether Article 26 or a taxable structure fits better if Article 27 does not apply.
Does your transfer qualify?
Exiloz scopes your merger, spin-off or reorganisation against the Article 27 business-versus-asset test before you commit to a structure.