VAT returns in Morocco are a crucial component of the country’s taxation system, requiring businesses to report and remit Value Added Tax collected on their taxable supplies. Understanding the proper filing procedures, deadlines, and compliance requirements for VAT tax filing in Morocco is essential for any business operating within the country. With a standard VAT rate of 20% and several reduced rates, Morocco’s VAT system requires careful attention to ensure proper VAT compliance in Morocco. 

This comprehensive guide explores everything businesses need to know about filing VAT returns in Morocco, from registration requirements to submission deadlines and common compliance pitfalls.

What is a VAT Return in Morocco?

A VAT return in Morocco is an official declaration that businesses must submit to the Moroccan tax authorities detailing their VAT transactions during a specific reporting period. This document reports the total output VAT collected from customers on taxable sales and the input VAT paid on business purchases and expenses. The difference between these two amounts determines whether the business needs to pay additional tax or is entitled to a refund.

VAT compliance in Morocco requires businesses to accurately account for all VAT transactions and submit their returns according to the established schedule. These returns are a fundamental part of Morocco’s taxation system, allowing the government to collect indirect taxes on the consumption of goods and services within the country.

Current VAT Rates in Morocco

Understanding the applicable VAT rates is essential for proper VAT compliance in Morocco. The country employs multiple VAT rates depending on the nature of goods and services.

Standard VAT Rate

The standard VAT rate in Morocco is 20%. This rate applies to all supplies of goods, services, and imports that aren’t eligible for reduced rates or exemptions.

Reduced VAT Rates

Morocco has several reduced VAT rates:

  • 14%: Applied to domestic transportation (excluding train transport), butter, and electricity.
  • 10%: Applied to banking services, hotel and restaurant services (excluding alcohol), petroleum products, edible oils, solar water heaters, and art objects.
  • 7%: Applied to water supplies, water and electricity meters, pharmaceutical products, and non-recoverable packaging of pharmaceutical products.

Zero-Rated and Exempt Supplies

Certain supplies are either zero-rated (0% with the right to deduct input VAT) or fully exempt:

  • Zero-rated (0%): Exports of goods and services, goods placed under customs suspensive regime, fertilizers, agricultural machinery, and basic food products.
  • Exempt: Basic foodstuffs, newspapers, and books (exempt without the right to deduct input VAT).

Who Needs to Register for VAT in Morocco?

VAT Registration Requirements

Any business providing taxable supplies in Morocco is liable to register for VAT immediately. Unlike many countries, Morocco does not have a minimum turnover threshold for VAT registration, meaning even businesses with low turnover must register.

Non-Resident Businesses

Non-resident businesses making taxable supplies in Morocco must also register for VAT. These businesses generally need to:

  1. Appoint a local fiscal representative in Morocco who will be responsible for VAT compliance
  2. Submit a VAT application that includes:
    • Details of the country of residency
    • Contact details and address of the offices
    • Details of the Moroccan fiscal representative
    • Power of Attorney between the business and the representative
    • Sales or other business contracts with Moroccan businesses

However, there is a VAT registration threshold of MAD 2,000,000 (approximately EUR 184,000) for non-resident companies.

How Often Must VAT Returns Be Filed in Morocco?

The frequency of VAT return filing in Morocco depends on the business’s profile and turnover:

Monthly Filing

Most businesses in Morocco must submit VAT returns every month. This requirement applies to all businesses except those qualifying for quarterly filing.

Quarterly Filing

VAT returns may be filed quarterly in two cases:

  1. Businesses with an annual turnover below MAD 1 million in the previous year (including newly registered businesses)
  2. Non-resident VAT-registered businesses

This quarterly filing option helps reduce the administrative burden on smaller businesses and non-resident entities.

VAT Return Deadlines in Morocco

Meeting VAT filing and payment deadlines is essential for VAT compliance in Morocco:

Filing Deadlines

  • Monthly returns: Due by the 20th of the month following the reporting period.
  • Quarterly returns: Due by the 20th of the month following the end of the quarter.

Payment Deadlines

VAT liabilities must be paid by the same deadline as the filing date – the 20th of the month following the reporting period. Ensuring timely payments is crucial to avoid penalties and maintain good standing with the Moroccan tax authorities.

How to File VAT Returns in Morocco

Online Filing System

VAT returns in Morocco must be filed electronically. The Moroccan Tax Administration (Direction Générale des Impôts, or DGI) provides an online portal for VAT filing through their teleservices platform7.

Step-by-Step Filing Process

  1. Access the DGI teleservices portal: Visit the official DGI teleservices website.
  2. Log in to your account: Enter your credentials to access your business tax account.
  3. Select VAT return option: Choose the appropriate form for your VAT return.
  4. Complete all required fields: Enter information about your sales, purchases, VAT collected, and VAT paid
  5. Calculate VAT due or refundable: Determine the difference between output VAT (collected) and input VAT (paid)
  6. Submit the return: File your completed return through the portal.l
  7. Make payment if applicable: If you have VAT to pay, complete the payment through the system or using other approved payment methods.
  8. Save confirmation: Retain proof of filing and payment for your records.s

Documentation Requirements

When filing VAT returns in Morocco, businesses should have the following information readily available:

  • Total sales and purchases for the reporting period
  • VAT collected on sales (output VAT)
  • VAT paid on purchases (input VAT)
  • Details of zero-rated or exempt transactions
  • Import and export transaction information
  • Supporting documentation for claimed deductions

VAT Invoicing Requirements in Morocco

Proper invoicing is crucial for VAT compliance in Morocco. All taxable transactions must be documented with invoices that include specific information.

Required Invoice Elements

Invoices must be issued for all transactions and should include:

  • Supplier’s name, address, and VAT identification number
  • Customer’s name and address
  • Invoice date and number
  • Description of goods or services provided
  • Quantity and price of goods or services
  • Applicable VAT rate and amount
  • Total amount including VAT

Tax Point Rules

The tax point (time of supply) in Morocco is generally at the point of payment, including advance payments. However, vendors may apply to the Ministry of Finance to use the date of invoice issuance as the tax point instead. For imports, the tax point is when goods clear customs.

What VAT Can Businesses Deduct in Morocco?

Input VAT Recovery

Businesses registered for VAT in Morocco can generally deduct input VAT paid on purchases related to their taxable business activities. This includes:

  • VAT is charged on goods supplied within Morocco
  • VAT paid on imports
  • VAT paid on business expenses directly related to taxable operations

Non-Deductible VAT

Certain input VAT is not recoverable, even for VAT-registered businesses. This typically includes:

  • VAT on purchases not related to the business
  • VAT on entertainment expenses
  • VAT on certain types of vehicles

It’s important to note that input tax is not refundable for businesses that are not registered for VAT in Morocco.

How to Recover VAT Credits and Refunds in Morocco

VAT Refund Eligibility

In Morocco, VAT refunds are available under specific circumstances:

  1. Businesses must make qualifying purchases of at least €2000.00 to request a VAT refund.
  2. Exporters with zero-rated outputs may apply for voluntary VAT registration to recover local Moroccan input VAT.

Refund Process

The VAT refund process in Morocco is not digital and requires paperwork. Refunds can be provided either:

  • In cash
  • As a credit card refund

Refund Timeline

While specific refund timelines aren’t provided in the search results, businesses should expect the process to take several weeks or months due to the manual nature of the application process.

VAT on Imports and Exports in Morocco

VAT on Imports

Imports into Morocco are generally subject to the standard VAT rate of 20%, unless they qualify for a reduced rate or exemption. The VAT is payable when goods clear customs.

VAT on Exports

Exports from Morocco are zero-rated, meaning they are exempt from credit. This allows exporters to reclaim input VAT on purchases related to their export business while not charging VAT on the exports themselves.

Reverse Charge Mechanism for VAT in Morocco

The reverse charge mechanism is applicable in Morocco for certain transactions involving non-resident businesses:

When a Moroccan customer receives services from a non-resident taxpayer who has not appointed a fiscal representative, the customer must:

  1. Declare the VAT on the transaction on their VAT return
  2. Account for the VAT due under the reverse charge mechanism

This mechanism shifts the responsibility for reporting VAT from the supplier to the recipient of the supplies, ensuring that VAT is properly accounted for when foreign businesses provide services to Moroccan customers.

Digital Services and VAT Obligations in Morocco

Digital services provided by foreign businesses to customers in Morocco are subject to the standard VAT rate of 20%. Non-resident businesses supplying digital services to Moroccan customers must:

  1. Register for VAT if their turnover exceeds the MAD 2,000,000 threshold
  2. Appoint a local tax representative.
  3. Comply with all VAT filing and payment requirements.

The application of VAT to digital services ensures that digital and physical products are taxed on an equivalent basis, regardless of where the supplier is located.

Common VAT Compliance Mistakes to Avoid in Morocco

To maintain proper VAT compliance in Morocco, businesses should avoid these common mistakes:

  1. Missing filing deadlines: Ensure all returns are submitted by the 20th of the month following the reporting period
  2. Incorrect application of VAT rates: Apply the correct VAT rate based on the nature of goods or services
  3. Failing to maintain proper records: Keep all VAT-related documentation for at least ten years
  4. Overlooking reverse charge requirements: Properly account for the reverse charge on applicable transactions
    .
  5. Neglecting registration requirements: Register for VAT immediately when providing taxable supplies in Morocco
  6. Inadequate invoicing: Ensure all invoices contain the required information

VAT Penalties and Compliance Risks in Morocco

Late Filing and Payment Penalties

Failure to pay VAT due by the deadline results in penalties:

  • 5% fine after 30 days of non-payment
  • An additional 15% fine after 60 days

Record-Keeping Requirements

Businesses must maintain VAT-related records for at least ten years. Failure to maintain adequate records can result in:

  • Inability to support VAT claims during audits
  • Potential rejection of input VAT deductions
  • Additional penalties for non-compliance

Audit Risks

The Moroccan tax authorities may conduct VAT audits to verify compliance. Maintaining accurate records and ensuring timely filings is the best way to mitigate audit risks.

Simplify Your VAT Registration and Filing in Morocco with Commenda

Managing VAT compliance in Morocco can be complex, particularly for non-resident businesses unfamiliar with local tax regulations. Commenda’s VAT services offer comprehensive support for businesses navigating Morocco’s VAT system, including:

  • VAT registration assistance
  • Appointment of fiscal representatives
  • VAT return preparation and filing
  • Compliance monitoring and advisory
  • Support during VAT audits and inspections

With Commenda’s expert guidance, businesses can ensure they meet all VAT obligations while minimizing compliance risks and optimizing their VAT position in Morocco.

FAQs about VAT Returns in Morocco

  1. What is VAT, and why do I need to file VAT returns in Morocco?

VAT (Value Added Tax) is a consumption tax placed on goods and services. In Morocco, businesses must file VAT returns to report the tax they’ve collected from customers and the tax they’ve paid on purchases, then remit the difference to the tax authorities or claim a refund if applicable.

  1. How often do I need to submit my VAT returns in Morocco, and what is the deadline?

Most businesses must file monthly VAT returns by the 20th of the month following the reporting period. Businesses with an annual turnover below MAD 1 million and non-resident businesses can file quarterly returns, also due by the 20th of the month following the quarter’s end.

  1. What happens if I miss the VAT return deadline in Morocco?

Missing the VAT payment deadline results in penalties: a 5% fine after 30 days of non-payment, and an additional 15% fine after 60 days.

  1. How do I calculate the VAT I owe or the refund I’m entitled to in Morocco?

Calculate your VAT liability by subtracting the input VAT (paid on purchases) from the output VAT (collected on sales). If output VAT exceeds input VAT, you owe the difference. If input VAT exceeds output VAT, you may be entitled to a refund or credit.

  1. What should I do if I make an error on my VAT return in Morocco?

If you discover an error on a submitted VAT return, you should file a corrected return as soon as possible. The Moroccan tax authorities may allow corrections without penalties if done voluntarily and promptly.

  1. Can I claim VAT refunds on business expenses in Morocco?

Yes, VAT-registered businesses can generally claim refunds on VAT paid on business expenses related to taxable activities. However, certain expenses may be excluded, and businesses must meet minimum thresholds for refund claims.

  1. What records do I need to keep for VAT purposes in Morocco?

Businesses must maintain all VAT-related records for at least ten years, including invoices, receipts, import/export documentation, VAT returns, and payment records.

  1. Do I need to register for VAT in Morocco if my business is based outside of Morocco?

Yes, non-resident businesses making taxable supplies in Morocco must register for VAT if their turnover exceeds MAD 2,000,000. They generally need to appoint a local fiscal representative to handle their VAT obligations.

  1. Are there any penalties for submitting inaccurate VAT returns in Morocco?

Yes, submitting inaccurate VAT returns can result in penalties. The exact penalties aren’t specified in the search results, but may include fines based on the amount of underpaid tax and potential interest charges.

  1. How can I file my VAT returns in Morocco (online/offline options)?

VAT returns in Morocco must be filed electronically through the Moroccan Tax Administration’s (DGI) online teleservices portal.