Morocco IIT snapshot

What are the current rate(s) of indirect tax?

A standard rate of 20% for most goods and services.
A reduced rate of 14%, with the right to credit input VAT, applies to specific items such as butter (with the exclusion of the homemade fabric), electrical energy, passenger and freight operations excluding rail transport operations etc.
The 14% rate applies, without the right to credit input VAT, to services rendered by brokers, commission agents and agents of insurance companies.
A reduced rate of 10% applies to specific items such as banking and credit services, accommodation and catering operations and transactions relating to securities traded on the stock exchange.
A reduced rate of 7% applies to specific items such as the sale and the delivery of water, electricity, pharmaceutical products, school supplies, refined sugar, etc.
A zero rate applies to goods supplied and services rendered for export by the taxpayer.

What are the current rate(s) of indirect tax?

Are there any confirmed or anticipated changes to these rates?

A standard rate of 20% for most goods and services.
A reduced rate of 14%, with the right to credit input VAT, applies to specific items such as butter (with the exclusion of the homemade fabric), electrical energy, passenger and freight operations excluding rail transport operations etc.
The 14% rate applies, without the right to credit input VAT, to services rendered by brokers, commission agents and agents of insurance companies.
A reduced rate of 10% applies to specific items such as banking and credit services, accommodation and catering operations and transactions relating to securities traded on the stock exchange.
A reduced rate of 7% applies to specific items such as the sale and the delivery of water, electricity, pharmaceutical products, school supplies, refined sugar, etc.
A zero rate applies to goods supplied and services rendered for export by the taxpayer.

These are the rates applicable for now. However, each year, the government publishes a financial law which log sometimes some changes to the VAT rates.

What are the current rate(s) of indirect tax?

What is the principal indirect tax?

A standard rate of 20% for most goods and services.
A reduced rate of 14%, with the right to credit input VAT, applies to specific items such as butter (with the exclusion of the homemade fabric), electrical energy, passenger and freight operations excluding rail transport operations etc.
The 14% rate applies, without the right to credit input VAT, to services rendered by brokers, commission agents and agents of insurance companies.
A reduced rate of 10% applies to specific items such as banking and credit services, accommodation and catering operations and transactions relating to securities traded on the stock exchange.
A reduced rate of 7% applies to specific items such as the sale and the delivery of water, electricity, pharmaceutical products, school supplies, refined sugar, etc.
A zero rate applies to goods supplied and services rendered for export by the taxpayer.

The Value Added Tax (VAT) is the principal indirect tax in Morocco.

It is a tax on consumer expenditure and is collected on business transactions and imports.

What are the current rate(s) of indirect tax?

Is there a registration limit for the tax?

A standard rate of 20% for most goods and services.
A reduced rate of 14%, with the right to credit input VAT, applies to specific items such as butter (with the exclusion of the homemade fabric), electrical energy, passenger and freight operations excluding rail transport operations etc.
The 14% rate applies, without the right to credit input VAT, to services rendered by brokers, commission agents and agents of insurance companies.
A reduced rate of 10% applies to specific items such as banking and credit services, accommodation and catering operations and transactions relating to securities traded on the stock exchange.
A reduced rate of 7% applies to specific items such as the sale and the delivery of water, electricity, pharmaceutical products, school supplies, refined sugar, etc.
A zero rate applies to goods supplied and services rendered for export by the taxpayer.

Not applicable.

What are the current rate(s) of indirect tax?

Does the same registration limit apply to non-established businesses?

A standard rate of 20% for most goods and services.
A reduced rate of 14%, with the right to credit input VAT, applies to specific items such as butter (with the exclusion of the homemade fabric), electrical energy, passenger and freight operations excluding rail transport operations etc.
The 14% rate applies, without the right to credit input VAT, to services rendered by brokers, commission agents and agents of insurance companies.
A reduced rate of 10% applies to specific items such as banking and credit services, accommodation and catering operations and transactions relating to securities traded on the stock exchange.
A reduced rate of 7% applies to specific items such as the sale and the delivery of water, electricity, pharmaceutical products, school supplies, refined sugar, etc.
A zero rate applies to goods supplied and services rendered for export by the taxpayer.

There is no registration limit for businesses that are not established in Morocco.

Individuals and legal entities with no permanent establishment in Morocco, but which engage in taxable transactions there, are subject to VAT in the same manner as residents.

What are the current rate(s) of indirect tax?

Does a non-established person need to appoint a fiscal representative in order to register?

A standard rate of 20% for most goods and services.
A reduced rate of 14%, with the right to credit input VAT, applies to specific items such as butter (with the exclusion of the homemade fabric), electrical energy, passenger and freight operations excluding rail transport operations etc.
The 14% rate applies, without the right to credit input VAT, to services rendered by brokers, commission agents and agents of insurance companies.
A reduced rate of 10% applies to specific items such as banking and credit services, accommodation and catering operations and transactions relating to securities traded on the stock exchange.
A reduced rate of 7% applies to specific items such as the sale and the delivery of water, electricity, pharmaceutical products, school supplies, refined sugar, etc.
A zero rate applies to goods supplied and services rendered for export by the taxpayer.

All non-residents must register, with the Minister of Finance, an accredited representative domiciled in Morocco who will be responsible for the taxpayer’s compliance with the VAT regulations.

Finance Law 2014 introduced an optional reverse charge mechanism. Under this regime, in case no accredited VAT representative was appointed, the Moroccan resident client becomes the legal taxpayer.

What are the current rate(s) of indirect tax?

How often do returns have to be submitted?

A standard rate of 20% for most goods and services.
A reduced rate of 14%, with the right to credit input VAT, applies to specific items such as butter (with the exclusion of the homemade fabric), electrical energy, passenger and freight operations excluding rail transport operations etc.
The 14% rate applies, without the right to credit input VAT, to services rendered by brokers, commission agents and agents of insurance companies.
A reduced rate of 10% applies to specific items such as banking and credit services, accommodation and catering operations and transactions relating to securities traded on the stock exchange.
A reduced rate of 7% applies to specific items such as the sale and the delivery of water, electricity, pharmaceutical products, school supplies, refined sugar, etc.
A zero rate applies to goods supplied and services rendered for export by the taxpayer.

Businesses with an annual turnover above MAD 1 million are required to submit VAT returns on a monthly basis. Otherwise, the returns can be submitted covering three-month accounting periods.

What are the current rate(s) of indirect tax?

Are penalties imposed for the late submission of returns/payment of tax?

A standard rate of 20% for most goods and services.
A reduced rate of 14%, with the right to credit input VAT, applies to specific items such as butter (with the exclusion of the homemade fabric), electrical energy, passenger and freight operations excluding rail transport operations etc.
The 14% rate applies, without the right to credit input VAT, to services rendered by brokers, commission agents and agents of insurance companies.
A reduced rate of 10% applies to specific items such as banking and credit services, accommodation and catering operations and transactions relating to securities traded on the stock exchange.
A reduced rate of 7% applies to specific items such as the sale and the delivery of water, electricity, pharmaceutical products, school supplies, refined sugar, etc.
A zero rate applies to goods supplied and services rendered for export by the taxpayer.

Yes. If a VAT return, or the corresponding payment, is submitted late a penalty can be imposed.

What are the current rate(s) of indirect tax?

Are any other declarations required?

A standard rate of 20% for most goods and services.
A reduced rate of 14%, with the right to credit input VAT, applies to specific items such as butter (with the exclusion of the homemade fabric), electrical energy, passenger and freight operations excluding rail transport operations etc.
The 14% rate applies, without the right to credit input VAT, to services rendered by brokers, commission agents and agents of insurance companies.
A reduced rate of 10% applies to specific items such as banking and credit services, accommodation and catering operations and transactions relating to securities traded on the stock exchange.
A reduced rate of 7% applies to specific items such as the sale and the delivery of water, electricity, pharmaceutical products, school supplies, refined sugar, etc.
A zero rate applies to goods supplied and services rendered for export by the taxpayer.

Yes. Additional declarations have to be submitted in some cases (ie statement of proportional deduction etc).

What are the current rate(s) of indirect tax?

Are penalties imposed in other circumstances?

A standard rate of 20% for most goods and services.
A reduced rate of 14%, with the right to credit input VAT, applies to specific items such as butter (with the exclusion of the homemade fabric), electrical energy, passenger and freight operations excluding rail transport operations etc.
The 14% rate applies, without the right to credit input VAT, to services rendered by brokers, commission agents and agents of insurance companies.
A reduced rate of 10% applies to specific items such as banking and credit services, accommodation and catering operations and transactions relating to securities traded on the stock exchange.
A reduced rate of 7% applies to specific items such as the sale and the delivery of water, electricity, pharmaceutical products, school supplies, refined sugar, etc.
A zero rate applies to goods supplied and services rendered for export by the taxpayer.

Yes. Penalties can be imposed for a range of errors or omissions.

What are the current rate(s) of indirect tax?

Can the tax incurred by overseas businesses be claimed if they are not registered in your country?

A standard rate of 20% for most goods and services.
A reduced rate of 14%, with the right to credit input VAT, applies to specific items such as butter (with the exclusion of the homemade fabric), electrical energy, passenger and freight operations excluding rail transport operations etc.
The 14% rate applies, without the right to credit input VAT, to services rendered by brokers, commission agents and agents of insurance companies.
A reduced rate of 10% applies to specific items such as banking and credit services, accommodation and catering operations and transactions relating to securities traded on the stock exchange.
A reduced rate of 7% applies to specific items such as the sale and the delivery of water, electricity, pharmaceutical products, school supplies, refined sugar, etc.
A zero rate applies to goods supplied and services rendered for export by the taxpayer.

VAT only applies to transactions which are deemed to have been carried on in Morocco where:

In the case of a sale of goods, delivery is accomplished in Morocco
In the case of all other activities, the services provided, the item leased or the rights transferred are used in Morocco.

What are the current rate(s) of indirect tax?

Deduction of VAT

A standard rate of 20% for most goods and services.
A reduced rate of 14%, with the right to credit input VAT, applies to specific items such as butter (with the exclusion of the homemade fabric), electrical energy, passenger and freight operations excluding rail transport operations etc.
The 14% rate applies, without the right to credit input VAT, to services rendered by brokers, commission agents and agents of insurance companies.
A reduced rate of 10% applies to specific items such as banking and credit services, accommodation and catering operations and transactions relating to securities traded on the stock exchange.
A reduced rate of 7% applies to specific items such as the sale and the delivery of water, electricity, pharmaceutical products, school supplies, refined sugar, etc.
A zero rate applies to goods supplied and services rendered for export by the taxpayer.

Input tax may not be recovered on purchases of goods and services that are not used for business purposes and that are considered to be non-deductible expenses for corporate tax purposes (for example, goods acquired for private use by an entrepreneur).

According to tax legislation in force, VAT on expenses paid in cash is deductible up to MAD 5,000 per day and per supplier, within a monthly limit of MAD 50,000 per supplier.