In brief: VAT in Morocco is a consumption tax applied at two rates since 2026: 20% (standard) and 10% (reduced). The former 7% and 14% rates have been eliminated. It follows a fractional payment system where each operator collects VAT on sales and deducts VAT on purchases. Exemptions exist with and without the right to deduction.
Value Added Tax in Morocco (VAT) is a consumption tax that applies to the purchase of goods or services. VAT in Morocco is levied on consumers as they consume. VAT in Morocco is applied ad valorem to the purchase price. It does not apply to business income like Corporate Tax.
It follows a fractional payment system. VAT is levied on a product whenever value is added at each stage of the supply chain.
Each operator applies the tax at the various stages of production through to the point of sale. The amount of VAT the end user pays corresponds to the cost of the product, minus the costs of materials used in the product that have already been taxed.
More than 160 countries worldwide use value added tax, and it is most common in the European Union.
Value added tax is based on taxpayers’ consumption rather than their income.
Value Added Tax (VAT) in Morocco
VAT in Morocco is governed by Title III of the General Tax Code (2026 edition).
Article 87 of the General Tax Code provides that VAT is a turnover tax that applies to:
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First, industrial, commercial, artisanal operations or those involving the practice of a liberal profession, carried out in Morocco;
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Second, import operations;
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Finally, the operations referred to in Article 89 below, carried out by persons other than the non-entrepreneurial State, acting
on a regular basis
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or occasionally
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regardless of their legal status, the form or nature of their involvement.
VAT therefore ignores the legal form or nature of the operator. It applies to operations based on their nature.
How Does This Tax Work in Practice?
Every operator carrying out transactions subject to this tax must collect and pay it.
They must file a return either monthly or quarterly depending on the volume of their activities (monthly if turnover exceeds 1 million dirhams per year).
Territorial Scope of Value Added Tax
It applies to all goods consumed or used in Morocco. Specifically:
- This tax does not apply to exported goods;
- Goods purchased by tourists may qualify for a tax refund (read Tax Refund in Morocco: What You Need to Know)
What Operations Are Taxable?
Article 89 of the General Tax Code lists the operations subject to VAT. These include:
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First, sales of goods produced in Morocco
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Second, goods sold by exporting merchants
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In addition, service operations
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Also, land subdivision and property development operations
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It also applies to building works and works of any kind
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Furthermore, certain special activities do not escape its scope:
liberal profession services;
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hotel accommodation;
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catering;
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banking operations;
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transport;
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…
Generally speaking, VAT applies to all commercial operations excluding civil operations. For example, the following are outside the scope of VAT:
- Land sales
- Agricultural operations
- Civil operations (notably the transfer of intangible elements of a business such as lease rights)
How Does VAT Work in Morocco?
VAT in Morocco operates on a fractional payment principle. Every taxable person must:
- Collect VAT on the sales they make
- Has the right to recover VAT on purchases charged by suppliers
The VAT due equals the difference between the VAT an operator collects and the VAT they are entitled to recover.
Example:
A merchant “A” sells a good at a unit price of 100 dirhams. The merchant must apply 20% VAT on this good and therefore sell it at 120 dirhams including all taxes. The additional 20 dirhams are collected on behalf of the Tax Administration.
Furthermore, if this good is purchased at 80 dirhams excluding VAT, merchant “A” will pay 96 dirhams including all taxes. The supplier will likewise have collected (96-80 = 16 dirhams).
In the general case, the 16 dirhams give rise to a deduction for our merchant.
At the end of the month (or quarter), merchant “A” must settle this VAT as follows:
VAT due = VAT collected (20) - Recoverable VAT (16) = 4 dirhams. 4 dirhams must be paid to the Tax Administration when filing the periodic VAT return.
As noted, this is the general case. There are exceptions to this rule, such as exemptions.
VAT Exemptions
Certain operations are exempt from VAT. Exemptions may be either:
- With the right to deduction
- Without the right to deduction
Exemption Without the Right to Deduction (Article 91 of the General Tax Code)
An exemption without the right to deduction means two things:
- First, the taxpayer must not collect VAT on the operation in question
- Second, they cannot benefit from the deduction on VAT charged on inputs for this operation
Accordingly, the merchant in this situation bears the cost of inputs at the tax-inclusive price. Furthermore, no VAT is to be added to their selling price.
This applies, for example, to basic necessities. The exhaustive list of these operations is provided in Article 91 of the General Tax Code.
Exemptions With the Right to Deduction (Article 92 of the General Tax Code)
An exemption with the right to deduction means two things:
- First, the taxpayer must not collect VAT on the operation in question
- Second, they may benefit from the deduction on VAT charged on inputs for this operation. Moreover, the taxpayer is generally entitled to a refund.
This applies, for example, to export operations. The exhaustive list of these operations is provided in Article 92 of the General Tax Code.
Frequently Asked Questions
What are the current VAT rates in Morocco?
Morocco applies two VAT rates since 2026: the standard rate of 20% and the reduced rate of 10%. The former rates of 14% and 7% have been eliminated by the reform initiated by the 2024 Finance Law and completed in 2026.
Who is required to register for VAT in Morocco?
Any individual or legal entity carrying out taxable industrial, commercial, artisanal, or liberal activities in Morocco must register for VAT. Businesses whose annual turnover exceeds MAD 500,000 are mandatorily subject to VAT. Certain activities below this threshold may opt for voluntary registration.
What is the difference between VAT exemption with and without the right to deduction?
An exemption without the right to deduction means the taxpayer neither collects VAT nor recovers input VAT on purchases. An exemption with the right to deduction means the taxpayer does not collect VAT but can recover input VAT and may be entitled to a refund. Export operations are a typical example of the latter.
How often must VAT returns be filed in Morocco?
VAT returns are filed either monthly or quarterly. Businesses with annual turnover exceeding MAD 1,000,000 must file monthly. Those below this threshold may opt for quarterly filing. All declarations are submitted electronically through the SIMPL-TVA portal.
Tools
Morocco VAT Qualification 2026 — Free Tool: Determine in a few clicks whether your transaction is out of scope, exempt, or taxable, and at which rate.
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