Payment deadlines: here is what changes from 2023 in Morocco

Law 69-21 recently promulgated in Morocco, relating to payment deadlines, was officially included in the Official Bulletin of June 15, 2023.

This law on payment deadlines aims to bring a breath of fresh air to the cash flow of Moroccan private sector companies. It targets small and medium-sized businesses in particular, by regulating payment deadlines more strictly.

Companies with a turnover of more than 10 million dirhams must submit a payment deadline declaration from the 1st quarter of 2024 . Failure to comply with this obligation could expose these companies to action.

Here are the main points to remember:

Calculation of payment deadlines : The payment deadline is calculated from the date of issue of the invoice. If the invoice is not issued within the stipulated period, the payment period begins from the end of the month of delivery or performance of the services.
Reporting obligation : An electronic quarterly declaration must be filed before the end of the month following the end of each quarter. Companies with a turnover of less than or equal to 10 million Dirhams excluding tax must submit an annual declaration for the years 2024 and 2025.
Sanctions : The law provides for monetary sanctions in the event of non-compliance with payment deadlines and for the delay or non-filing of the quarterly declaration. Fines vary depending on the annual turnover of the company and can reach up to 250,000 dirhams for large companies.
Progressive application : The law applies gradually, depending on the turnover of companies. It came into force on July 1, 2023, for companies with a turnover greater than 50 million Dirhams, and will apply from January 1, 2024 for companies with a turnover between 10 and 50 million, and from January 1, 2025, for those with a turnover between 2 and 10 million.
Legal payment deadline : If not otherwise agreed, payment deadlines cannot exceed 60 days from the invoice date. For recurring transactions within a month, payment is due at the end of the following month.
Business partners : Payment terms between business partners must be set in advance and cannot exceed 120 days. For public establishments, the deadline is calculated from the date of supervision of the performance of the service.
Fines : Violations are punishable by a fine equivalent to the current policy rate plus 0.85% for each month of delay.

Payment deadlines: Scope of application of law 69-21

This law applies to natural or legal persons whose annual turnover excluding taxes, exceeds 2 million dirhams. In addition, it applies in public companies operating in the commercial sector.

What new features does this law introduce?

Payment period

Law 69-21 established the obligation for each merchant to comply with payment deadlines according to the following terms:

First, the payment deadline is set at 60 days from the invoice date;
Then, if an agreement is reached between the parties concerned, this period can reach 120 days;
Finally, exceptionally, a maximum period of 180 days applies for professionals working in specific or seasonal sectors.

Start date for calculating payment deadlines

The calculation begins from the invoice date.

In order to avoid manipulation of invoice issue dates, the law introduces a strict rule for the obligation to invoice. Indeed, the seller must issue the invoice no later than the last day of the month:

Firstly, delivery of the goods,
Secondly, the execution of the service.

Otherwise, payment deadlines run from the end of the month during which the delivery of goods or the performance of the service took place.

Gradual deployment of the law

The new law will come into force gradually according to the following schedule:

Turnover (excluding tax)	Effective date
CA > 50,000,000	July 1, 2023
10,000,000 < CA ≤ 50,000,000	January 1, 2024
2,000,000 < CA ≤ 10,000,000	January 1, 2025

PS: The various provisions only apply prospectively to invoices issued after the effective date.

Payment deadlines: Reporting obligations

payment deadlines morocco, upsilon consulting

In addition to establishing a payment deadline, the law introduces a reporting obligation relating to supplier debts. Indeed, the traders concerned (and companies) must file a quarterly declaration.

This declaration is made electronically before the end of the month following the end of each quarter.

The first is, therefore, due before October 31, 2023. It concerns companies with a turnover greater than 50 million dirhams.

Furthermore, note that even in the absence of overdue invoices, the declaration must be filed.

This declaration must be accompanied by a detailed statement of invoices exceeding the payment deadlines covered by:

Annual turnover excluding tax (in MAD)	Aimed by
CA ≥ 50,000,000	Auditor
CA < 50,000,000	Chartered accountant or chartered accountant

Sanctions regarding payment deadlines and declarations

In case of delay

A fine applies to the amount not paid within the set deadlines, to be paid to the Treasury equivalent to:

First, for the first month of delay: BAM reference rate (currently 3%)
Then, for each additional month, 0.86% is added.

The amount of the fine payable is paid spontaneously after the aforementioned declaration.

Furthermore, disputed invoices that have been the subject of legal appeal do not give rise to the application of the fine.

In case of non-declaration

The law provides for sanctions in the event of delay or non-filing of the aforementioned quarterly declaration. Additionally, penalties apply for non-payment of the fine.

Annual turnover excluding tax (in MAD)	Fine Amount (in MAD)
2,000,000 < CA ≤ 10,000,000	5,000
10,000,000 < CA ≤ 50,000,000	12,500
50,000,000<CA≤ 200,000,000	50,000
200,000,000 < CA ≤ 500,000,000	125,000
500,000,000 < CA	250,000

Upsilon Consulting offers you a complete range of professional services adapted to your business needs:

Assistance in business creation;
Outsourcing of accounting and tax obligations;
Administrative management of personnel;
Processing of pay slips;
Advice for tax optimization;
Legal secretarial services;
Audit and statutory audit missions;
Business organization advice;
…

Our team is present to support you in several Moroccan cities, including Rabat, Casablanca, Tangier, Kenitra, and Marrakech, and we offer our services throughout Morocco.

Contact Upsilon Consulting

Analysis of the provisions of Law 69-21 on payment deadlines in Morocco

With the promulgation of this law, Morocco is taking a significant step towards improving its business climate. Indeed, this legislation aims to:

First, facilitate commercial transactions;
Second, protect small and medium-sized enterprises (SMEs) against abusive payment deadlines imposed by certain large companies.

The entry into force of this law and the severe sanctions planned should strengthen the financial health of SMEs.

A progressive application

One of the most notable features of the Payment Deadlines Act is its progressive application.

Indeed, instead of immediately imposing the law on all companies, the Moroccan authorities chose to implement it in three phases.

First of all, it applies to companies whose turnover exceeds 50 million dirhams excluding taxes.

Then, it will be extended to companies whose turnover is between 10 and 50 million dirhams excluding taxes. This second phase of the application of payment deadlines comes into force from January 1, 2024.

And finally, it will concern companies whose turnover is greater than 2 million dirhams excluding taxes but less than 10 million dirhams excluding taxes.

This progressive approach aims to support SMEs starting with large companies. By incentivizing large companies to comply with the new regulations and pay their suppliers on time, the law is expected to improve the cash flow of SMEs, thereby promoting the financial stability and growth of these companies.

Clear and flexible payment deadlines

Law 69-21 on payment deadlines establishes clear and flexible payment deadlines. Three deadlines are defined: 60 days from the invoice date when the deadline is not agreed between the parties, 120 days from the invoice date when the deadline is agreed between the parties, and exceptionally, 180 days in certain specific conditions.

A significant change compared to previous legislation is that payment terms are no longer calculated from receipt of the goods or performance of the service, but from the date of issue of the invoice. This eliminates any ambiguity on the date of calculation of deadlines and strengthens the position of suppliers.

A mandatory self-declaration

Law 69-21 also introduces mandatory regulatory self-declaration for companies. This means that customers, not suppliers, must report their contractual payment deadlines. The Directorate General of Taxes plays a key role in this process by serving as a third party.

This measure aims to protect SMEs by preventing them from finding themselves in a weak position vis-à-vis large corporate clients. Previously, in the event of late payment, SMEs themselves had to claim late payment penalties, which could jeopardize their customer-supplier relationship. Now, customers must declare their payment deadlines, providing better assurance that SMEs will be paid on time.

Periodic and obligatory

The law requires businesses to report their payment deadlines quarterly, even if they have no overdue invoices. This regular obligation aims to integrate the declaration of payment deadlines into the current practices of companies, just as they do for their annual financial statement or their quarterly VAT declaration.

To ensure compliance, the law provides for sanctions and fines for non-compliance with its provisions. This should encourage businesses to follow the law by paying their invoices on time.

In conclusion, the new law on payment deadlines in Morocco is an important step to improve the business climate and protect SMEs against abusive payment deadlines. Its progressive application, clear and flexible payment deadlines, and mandatory self-declaration system help to strengthen the financial stability of companies and promote a culture of on-time payment.