Article 44 of the Saudi Value Added Tax Law

This article prohibits one specific thing: an unregistered person issuing a tax invoice for value added tax.

A "tax invoice", under Article 1, is an invoice issued for supplies subject to the tax in line with the requirements set out in the Law and the Regulations. Its issue by an unregistered person gives the buyer the impression that the tax is due and lawfully collected, which is what the article punishes.

The elements of the article:

• The offender: an unregistered person.
• The act: issuing a tax invoice.
• The penalty: a fine not exceeding SAR 100,000, meaning this is the maximum fine, not a fixed amount.
• More severe penalties: this penalty does not prejudice any more severe penalty provided in any other law.

Article 44 concerns the act of an unregistered person issuing a tax invoice. It differs from Article 43, which punishes failing to pay the tax due within the period the Regulations set with a fine of 5% for each month or part of a month, and from Article 45, which punishes with a fine of not more than SAR 50,000 failing to keep invoices and records, obstructing Authority employees and violating any other provision of the Law or the Regulations.

Anyone dealing with a supplier whose registration they doubt would do well to verify it. Anyone charged with this violation is advised to consult a lawyer specializing in tax and commercial matters.