A business is defined under section 2 of Value Added Tax Act (VATA) to mean, among other things, “trade, commerce or manufacture, profession, vocation or occupation….”

The Black’s Law Dictionary defines “going concern” as an “existing solvent business which is being conducted in the usual and ordinary way which it was organised”. 

Currently, the Kenya Revenue Authority (KRA) has not issued specific interpretive guidance or public rulings on what constitutes as a TOGC. In Elizabeth Washeke & 62 others V Airtel Networks (K) Limited & Another (2013) eKLR the court describes a going concern as;

“A 'going concern' means a business in operation and whether transfer has occurred is a factual matter, to be determined objectively by reference to all relevant factors considered cumulatively, the list not being exhaustive and none of the factors individually decisive, as held in the South Africa Case of South African Airways (PTY) Limited versus Aviation Union of South Africa and Others, Supreme Court of Appeal of south Africa, Case No. 123 of 2010.”

The United Kingdom VAT Notice 700/9 provides detailed guidance on TOGCs. It stipulates that for a transaction to qualify as a TOGC, it must involve the transfer of a...