Chapter XI: Crimes and Penalties

Article 41:

With the exception of tax evasion acts set forth herein , whomsoever violates the procedures or regulations prescribed in this Law and the Executive Regulation hereof shall be fined a minimum of L.E. 100 up to a maximum of L.E. 2000 plus the tax due and the additional tax . The following cases shall be deemed violation of the provisions of this Law:
  • Failure to file the return and to pay the tax within the period specified in article (16) herein for a period not exceeding 60 days thereof .
  • Submission of false data regarding sales of taxable goods or services if the excess proved to be not more than 10% over what was stated in the return
  • Violation of the provisions set forth in article (15) of this Law
  • In case of shortage or surplus in the goods deposited in the free zones and shops, not exceeding 10% for justifiable reasons.
  • Failure to notify the Department of changes occurred in data of the application for registration form within the period determined.
  • Obstructing Department Officers from carrying out their duties or exercising their competences in control and inspection and examination and audit and request and review of documents


*Amended by Law NO 91 of 1996 published in the Official Gazette NO 25 r. on the 30 th of June , 1996. Before amendment the item stipulated the following : “Failure to file the return and to pay the tax within the period specified in article ( 16 ) herein for a period not exceeding 30 days thereof . “

Article 42:

The Minister or any person so authorized may effect reconciliation regarding the violations stipulated in the preceding article in return for payment of tax and additional tax if due as well as a compensation within the limits of the fine stipulated in the preceding article . In consequence of reconciliation the criminal action shall be dropped , legal action shall be ceased and all the subsequences thereof shall be annihilated .

Article 43:

Without prejudice to any heavier penalty provided for in any other Law , attempt or commitment of tax evasion shall be penalized by imprisonment for a term not less than one month and / or a fine not less than L . E 1000 and not exceeding L. E 5000. Perpetrators and partners shall be sentenced to jointly pay the Tax and The Additional Tax and a compensation not exceeding same amount of tax *. In case of recommitment of tax evasion, such penalty and compensation may be doubled. Cases of evasion shall be expeditiously heard when submitted to court.

* Amended by Law NO 91 of 1996 published in the Official Gazette NO 25 (bis) on 30.6.1996 Before amendment the article stipulated the following : “Without prejudice to any heavier penalty provided for in any other Law, attempt or commitment of tax evasion shall be penalized by imprisonment for a term not less than six months and / or a fine not less than L.E.1000 and not exceeding L.E. 5000 . Perpetrators and partners shall be sentenced to jointly pay the Tax and the Additional Tax and a compensation not exceeding three times of the amount of tax . In case assessment of tax is not possible the court shall decide the amount of compensation provided that such compensation shall not exceed L.E. 50000.

Article 44:

The following shall be deemed tax evasion penalized by the penalties provided for in the previous article.
  • Failure to apply for registration in the prescribed date(s) .
  • Sale or importation of goods and / or supply of service without including the same in the return accompanied with payment of tax due.
  • Unjustifiable deduction of tax, fully or partially, in violation of rules and limits of credit .
  • Unjustifiable refund or claim of tax refund, fully or partially .
  • Filing false or fabricated documents or records or data for the purpose of evading payment of Tax fully or partially.
  • Underreporting sales if the excess proved to be more than 10% of the amount of tax reported in the return .
  • Discovery of shortage or surplus in commodities deposited in free zones and shops exceeding 10%.
  • Non- issuance of invoice by the registrant for his / her sales of taxable goods and / or services .
  • Non- inclusion of self- supplies in the return .
  • Failure to file the return and pay the tax for a period exceeding 60 days.*
  • Issue of tax invoice(s) by non- registrants .


* Amended by Law NO 91 of 1996 published in the Official Gazette NO 25 (bis) on the 30 th of June , 1996. Before amendment the article stipulated the following : “Failure to file the return and to pay the tax for a period exceeding 30 days. “

Article 45:

Regarding tax evasion crimes, prosecution shall not be submitted to court, nor action shall be set in motion, except by a warrant from the Minister or any person so authorized. The Minister or any person so authorized may reconcile in said crimes before the delivery of final judgement in return for payment of tax due and Additional Tax as well as a compensation equals same amount of tax *. In case of delivery of judgement and before being final the Minister or any representative so authorized may reconcile in return for payment of tax and the Additional Tax as well as a compensation equals three times the amount of tax. In case of recurrence of evasion, compensation may be doubled . Reconciliation, shall terminate the Criminal action and annihilate effects thereof including penalties delivered by the court

* The second paragraph in article (45) was amended by Law NO 91 of 1996, before amended the paragraph stipulated the following : The Minister or any person so authorized may reconcile in said crimes before the delivery of final judgement in return for payment of tax due and Additional Tax as well as a compensation equals two times the amount of Tax .“

Article 46:

In case an act of tax evasion is committed by a juridical person, the responsible for such an act shall be the acting partner or the managing director or the delegated member or the chairman of board of directors, whoever actually takes the responsibility of management as the case may be.


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