VAT on real estate transactions in Morocco mainly concerns three types of operations:
- First, real estate work operations;
- Second, land development operations;
- Third, real estate development operations.
VAT on real estate transactions in Morocco – Real estate work
Real estate contractors are persons who perform operations that meet the following conditions:
- First, the operation is carried out by a company with the necessary personnel and equipment;
- Then, the contractor uses specific materials and tools;
- Finally, these materials allow the construction, renovation and maintenance of buildings.
In addition, the contractor of real estate works can work within a professional framework or simply on an occasional basis.
These transactions are subject to VAT at a rate of 20%.
VAT on real estate transactions in Morocco – Land development
Both the development and servicing of land are regarded as real estate operations.
Read More : Land development operations (VAT)
VAT on real estate transactions in Morocco – Real estate development
Article 89-II-5° of the General Tax Code defines a real estate developer as any person who meets the following conditions:
- Firstly, a real estate developer is not a real estate contractor;
- Secondly, the real estate developer proceeds, using is own means or through suppliers, to the construction of one or more buildings;
- Finally, these buildings are intended for sale or rent.
Real estate development transactions are subject to the value added tax whether the developer carries them out them directly or in quality of project owner.
VAT rate applied to these transactions is 20%.