VAT in Morocco: A Complete Guide for Business Owners

Understanding Value Added Tax (VAT), known as TVA (Taxe sur la Valeur Ajoutée) in Morocco, is essential for running a compliant business. This guide covers everything you need to know.

VAT Rates in Morocco

Morocco applies different VAT rates depending on the type of goods or services:

Standard Rate: 20%

Applies to most goods and services, including:

• General merchandise
• Professional services
• Restaurant meals
• Most B2B transactions

Reduced Rates

14% Rate:

• Real estate transactions
• Transportation services
• Certain food products

10% Rate:

• Banking and financial services
• Hotel accommodations
• Some petroleum products

7% Rate:

• Basic necessities
• Pharmaceutical products
• School supplies
• Water and electricity (domestic use)

0% Rate (Exempt with Credit)

• Exports
• International transportation
• Certain agricultural products

Who Must Register for VAT?

Mandatory Registration

Businesses must register if annual turnover exceeds:

• 2,000,000 MAD for industrial, commercial, or artisanal activities
• 500,000 MAD for service providers

Voluntary Registration

Smaller businesses can voluntarily register to:

• Recover input VAT
• Appear more professional to clients
• Work with larger companies requiring VAT invoices

VAT Declaration and Payment

Declaration Frequency

• Monthly: Turnover > 1,000,000 MAD annually
• Quarterly: Turnover < 1,000,000 MAD annually

Payment Deadlines

• Monthly declarations: Before the 20th of the following month
• Quarterly declarations: Before the 20th following the quarter end

Input VAT Recovery

You can recover VAT paid on:

• Raw materials and inventory
• Operating expenses
• Capital equipment
• Professional services

Non-Recoverable VAT

• Personal expenses
• Entertainment and gifts (with exceptions)
• Passenger vehicles (with exceptions)
• Items not used for taxable activities

Common VAT Mistakes to Avoid

1. Incorrect rate application - Verify the correct rate for each product/service
2. Missing invoices - Keep all supporting documentation
3. Late declarations - Set up reminders for deadlines
4. Calculation errors - Use automated software like Hisab

How E-Invoicing Helps VAT Compliance

Modern e-invoicing solutions like Hisab:

• Automatically apply correct VAT rates
• Generate compliant invoices
• Calculate totals accurately
• Prepare VAT declaration reports
• Maintain required records