Tax Rates & VAT in Morocco
Tax Rates & VAT in Morocco
Understanding Morocco's Value Added Tax (TVA) system is essential for compliant invoicing. This guide explains all tax rates and when to use them.
Morocco VAT Rates Overview
Morocco has five VAT rates:
| Rate | Name | Common Uses |
|---|---|---|
| 20% | Standard Rate | Most goods and services |
| 14% | Intermediate Rate | Transport, electricity, certain services |
| 10% | Reduced Rate | Banking operations, legal professions |
| 7% | Super-Reduced Rate | Basic necessities, water, certain food |
| 0% | Exempt/Export | Exports, exempt items |
20% - Standard Rate
The most common rate for businesses.
When to Use:
- Professional services (consulting, IT, marketing)
- Most retail goods
- Restaurant and catering services
- Equipment and machinery
- Telecommunications
- Most B2B services
Example:
Consulting Services: 10,000 MAD
VAT (20%): 2,000 MAD
Total: 12,000 MAD
14% - Intermediate Rate
For specific categories of goods and services.
When to Use:
- Passenger transport
- Electricity consumption
- Insurance operations
- Certain petroleum products
- Some construction materials
Example:
Transport Service: 5,000 MAD
VAT (14%): 700 MAD
Total: 5,700 MAD
10% - Reduced Rate
For regulated professions and financial services.
When to Use:
- Banking and financial services
- Legal services (lawyers, notaries)
- Architectural services
- Some real estate transactions
- Certain medical equipment
Example:
Legal Consultation: 8,000 MAD
VAT (10%): 800 MAD
Total: 8,800 MAD
7% - Super-Reduced Rate
For essential goods and services.
When to Use:
- Drinking water
- Basic food products
- Pharmaceutical products
- School supplies
- Certain agricultural products
Example:
Food Products: 3,000 MAD
VAT (7%): 210 MAD
Total: 3,210 MAD
0% - Exempt/Export
No VAT charged.
When to Use:
- Export of goods and services
- International transport
- Items exempt by law
- Certain agricultural exports
Example:
Export Services: 15,000 MAD
VAT (0%): 0 MAD
Total: 15,000 MAD
Important: Even at 0%, you must still indicate the tax rate on the invoice.
Setting Default Tax Rate
Configure your default rate in settings:
- Go to Settings > Organization
- Find Tax Settings section
- Select your default tax rate
- This applies to new line items automatically
Applying Tax in Invoices
Per Line Item
Each line item can have a different tax rate:
Website Development 10,000 MAD 20% → 2,000 MAD
Hosting (1 year) 1,200 MAD 20% → 240 MAD
Domain (exempt) 150 MAD 0% → 0 MAD
─────────────────────────────────────────────────────
Subtotal: 11,350 MAD
Total VAT: 2,240 MAD
Grand Total: 13,590 MAD
Tax Breakdown
Invoices show VAT breakdown by rate:
- VAT 20%: 2,240 MAD
- VAT 0%: 0 MAD
Tax Reports
Hisab automatically calculates your tax obligations:
- Go to Reports > Tax Report
- Select the period (month/quarter)
- View breakdown by rate
- Export for your accountant or DGI filing
The report shows:
- Taxable amount per rate
- VAT collected per rate
- Total VAT for the period
Common Questions
Which rate should I use for software development? 20% - Standard rate for professional services.
What about mixed invoices? Apply the appropriate rate to each line item separately.
Do I charge VAT to foreign clients? Exports are typically 0% VAT. Verify with your accountant.
What if I'm not VAT registered? You must register if turnover exceeds 500,000 MAD annually.
Best Practices
- Verify rates regularly: Tax laws can change
- Consult an accountant: For complex situations
- Keep records: Store all invoices for 10 years
- Use correct rates: Errors can lead to penalties
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