Article 26 - Tax Evasion Penalties

Article (26)

Tax Evasion Penalties

1. Without prejudice to any more severe penalty applicable under any other law, a prison sentence and monetary penalty not exceeding five times the amount of evaded Tax or either of the two, shall be imposed on:

a. a Taxable Person who deliberately fails to settle any Payable Tax or Administrative Penalties.

b. a Taxable Person who deliberately understates the actual value of his Business or fails to consolidate his related Businesses with the intent of remaining below the required registration threshold.

c. a Person who charges and collects amounts from his clients claiming them to be Tax without being registered.

d. a Person who deliberately provides false information and data and incorrect documents to the Authority.

e. a Person who deliberately conceals or destroys documents or other material that he is required to keep and provide to the Authority.

f. a Person who deliberately steals, mis-uses or causes the destruction of documents or other materials that are in the possession of the Authority.

g. a Person who prevents or hinders the Authority’s employees from performing their duties.

h. a Person who deliberately decreases the Payable Tax through Tax Evasion or conspiring to evade Tax.

2. The imposition of a penalty under the provisions of this Law or any other Law shall not exempt any Person from the liability to pay any Payable Tax or Administrative Penalties under the provisions of this Law or any Tax Law.

3. The competent court shall impose Tax Evasion penalties against any Person who is proven to have been directly involved or instrumental in Tax Evasion pursuant to said Federal Law No. (3) of 1987.

4. Without prejudice to Clause (2) of this Article, any Person who is proven to have been directly involved or instrumental in Tax Evasion pursuant to Clause (3) of this Article shall be jointly and severally liable with the Person whom he has assisted, to pay the Payable Tax and Administrative Penalties pursuant to this Law or any other Tax Law.