In brief: Businesses in Morocco can obtain a VAT credit refund when deductible VAT exceeds collected VAT. Exporters and exempt-with-deduction operators are the main beneficiaries. Filing requires detailed supporting documents, and requests must be submitted within one year.
VAT Credit Refund in Morocco
In Morocco, businesses can obtain a VAT credit refund in certain cases. However, it is necessary to file a request and comply with specific substantive and procedural rules.
In this article, we explain:
- First, the principle behind VAT credit refunds in Morocco;
- Second, how to calculate the refundable VAT credit amount;
- Third, the procedure to follow to obtain a VAT credit refund.
VAT Credit Refund: The Principle
As a general rule, businesses act as collectors of Value Added Tax (VAT).
The business:
- Collects VAT on its sales from customers;
- Pays VAT charged on its purchases to suppliers (or directly to customs for imports).
The VAT payable is calculated as the difference between the VAT collected on taxable transactions (sales, services, etc.) and the deductible VAT on purchases, expenses, and fixed assets.
When the deductible VAT exceeds the VAT collected, the business holds a VAT credit.
In certain cases provided for by the General Tax Code, your business can obtain, upon request, a VAT credit refund.
Why VAT Credit Refunds Exist
To understand the necessity of this system, let us examine the specific case of exporters in the remainder of this article.
The export of goods and services is exempt from VAT with the right to deduction under the provisions of Article 92-I-1° of the General Tax Code (CGI).
In principle, VAT is based on a concept known as “border adjustment,” which ensures that the exported product is subject only to the taxation of the destination country. This principle aims to avoid double taxation.
However, since the exporter uses purchases that include VAT during the production of the goods in question, this inevitably creates a VAT credit. In the case of exporters, this VAT credit is “structural.” The exporter does not collect VAT on sales. As a result, the VAT paid to suppliers accumulates structurally as a credit. The exporter will never be able to offset it against sales.
To remedy this situation, the General Tax Code has allowed exporters to file VAT credit refund requests.
Amount of Refundable Tax
Refunds are settled up to the amount of VAT calculated notionally based on the exempt turnover. This means that even if the deductible VAT exceeds a theoretical amount equal to:
Exempt turnover * tax rate
The difference cannot be refunded. However, when the tax amount to be refunded is less than the ceiling set above, the difference may be used to determine the refund ceiling for the following period(s).
Conditions for Exercising the Right to a Refund
Since the 2014 Finance Act came into force, the right to a VAT refund depends solely on the actual and documented payment of the tax:
- For imports, proof of tax payment is established by producing customs clearance receipts;
- For domestic purchases, proof is provided by including payment references and methods (cash, checks, bills of exchange, etc.) on invoices or statements.
Practical Steps for Filing a VAT Credit Refund Request in Morocco
I- The refund request referred to in Article 103(1) of the General Tax Code must be submitted on or based on a form issued by the Tax Administration, accompanied by the following supporting documents:
1. For direct imports by beneficiaries eligible for a refund:
- A copy of purchase invoices,
- A copy of the import declaration and the VAT payment receipt
- A statement indicating, for each import
- First, the import declaration number,
- Also, the number and date of the customs receipt confirming final payment of duties and the exact nature of the goods,
- Finally, the value used to calculate the VAT and the amount paid;
2. For local purchases, the request must include a summary statement showing:
a) References to invoices or statements as well as the tax identification number assigned by the tax office appearing thereon;
b) The exact nature of the goods, assets, services, processing work, or other work, the amount of the corresponding statements or invoices, and where applicable, the VAT rate and amount shown on those invoices or statements;
c) The payment references and methods relating to those invoices or statements.
The above-mentioned statements must also include, in a separate column, the registration number of purchase invoices, processing invoices, or customs documents.
Exporters must also attach to the above documents the export notices prepared in accordance with a form provided by the Tax Directorate and copies of sales invoices issued in the name of foreign recipients, stamped by customs services and listed on separate statements.
Other Refund Cases
This situation does not only apply to exporters. It also applies to all activities benefiting from exemption with the right to deduct as provided in Articles 92 and 94 of the General Tax Code. For example, sales of:
- Fertilizers;
- Certain agricultural products;
- Capital goods to be recorded in a fixed asset account;
- Equipment for international transport companies;
- …
Furthermore, apart from transactions carried out under Articles 92 and 94 of the General Tax Code, Article 103 provides for the following cases:
- Cessation of taxable activity,
- Businesses that have paid tax on their capital goods,
- Leasing companies
Capital Equipment
Also, starting January 1, 2016, the tax charged on equipment, machinery, and tools acquired domestically or through imports by taxpayers qualifies for a refund in accordance with Article 103 bis of the General Tax Code, excluding those acquired by public establishments and enterprises.
Real Estate Developers
Moreover, the right to a refund also extends to real estate developers, whether individuals or legal entities, who carry out construction programs for low-value housing with an area between 50 and 60 m2 and a sale price not exceeding 140,000 dirhams.
Main Grounds for Refund Rejection
For a VAT refund request to be accepted, the following grounds for rejection must be avoided:
-
Time-barring: Filing the request after the deadline
VAT refund requests are time-barred after a period of 1 year. This period begins at the end of the quarter during which the taxpayer paid the VAT.
For example, an invoice that the taxpayer declared in June 2020 qualifies for a refund until June 30, 2021. After this deadline, the refund can no longer be claimed.
-
Other grounds for rejection - Formal requirements:
The tax administration may reject a VAT refund for formal reasons. Here are some examples:
- Invoice not presented;
- Irregular invoice (not meeting commercial standards)
- Delivery note not accepted;
- Duplicate claim;
- Missing tax identification number;
- Invoice number: missing, overwritten, or added after the fact (without certification);
- Missing import declaration;
- Invoice date: missing, overwritten, or added after the fact;
- Invoice predating the business registration
- Discrepancy between the single goods declaration (DUM) number and the one on the receipt
- Missing copy of import purchase invoice;
- Handwritten receipt not certified by customs.
- Missing original VAT payment receipt;
- …
Simplified VAT Credit Refund Procedure
To improve the processing of VAT refund requests, Decree No. 2-18-638 of March 4, 2019 introduced a simplified VAT credit refund procedure.
The businesses eligible for this procedure are those whose accounts have been certified by a chartered accountant or a statutory auditor.
In this regard, the applicant must prepare and file the VAT credit refund request at the end of each quarter.
The applicant must accompany this refund request with three important documents:
- First, a summary statement of turnover achieved under VAT exemption or suspension;
- Second, a summary statement of purchases for which the applicant paid recoverable VAT;
- Finally, a certificate issued by the company’s statutory auditor (or a professional chartered accountant).
The certificate must confirm the accuracy of the information contained in the detailed deduction statement. In addition, it must attest to their consistency with the company’s accounting records.
To this end, the statutory auditor verifies the company’s eligibility for the simplified VAT credit refund procedure.
This article is up to date with the tax provisions in force in 2026.
Upsilon Consulting can manage your VAT credit refund file. Request a quote online.
Frequently Asked Questions
How long does it take to obtain a VAT credit refund in Morocco?
Under the standard procedure, the processing time can take several months depending on the complexity of the file. The simplified procedure, available to companies whose accounts are certified by a chartered accountant or statutory auditor, is designed to reduce this timeframe. In practice, processing times vary between three and six months.
Which businesses are eligible for a VAT credit refund in Morocco?
Businesses that accumulate a structural VAT credit are eligible, particularly exporters who benefit from VAT exemption with the right to deduction, companies that have made significant investments generating substantial input VAT, and businesses subject to VAT withholding at source.
What documents are required to file a VAT refund request?
The applicant must provide a summary statement of turnover achieved under VAT exemption or suspension, a detailed statement of purchases with recoverable VAT, and, under the simplified procedure, a certificate from a statutory auditor or chartered accountant confirming the accuracy of the information.
Can a company offset its VAT credit against other taxes in Morocco?
Moroccan tax law does allow companies to offset their VAT credit against other tax liabilities, such as corporate income tax or withholding taxes, subject to the conditions set out by the General Tax Code. However, when the credit cannot be fully absorbed through offset, the company may file for a direct refund under either the standard or simplified procedure. The simplified procedure, requiring certification by a statutory auditor or chartered accountant, is generally faster and can be processed within three to six months.
Tools
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