Value-added tax (VAT)
VAT is levied under the Moroccan Tax Code and is due on all industrial, commercial, and handicraft transactions taking place in Morocco, as well as on importation operations.
The standard rate of VAT is 20%. Lower rates of 7%, 10%, and 14% apply to specifically designated operations.
The sale of goods is considered as taking place in Morocco, and thus subject to VAT, if the goods sold are delivered in Morocco.
The sale of services is considered as taking place in Morocco, and thus subject to VAT, if the services sold are consumed or used in Morocco.
Two types of exemptions from VAT are provided. The first is an exemption with credit, equivalent to the zero tax concept. The second is an exemption without credit.
The zero-rated supplies include (but are not limited to) supplies of the following goods or services:
- Exported goods and services.
- Certain agricultural equipment supplied under prescribed circumstances.
- Investment goods recorded as fixed assets in the company accounting and acquired during the first 24 months following the beginning of activity.
- Offshore banks for certain specific operations, such as interest and commissions.
- Goods and services rendered to companies established in free trade zones (FTZs).
- Activities related to hydrocarbon exploration, etc.
Exempt supplies without deduction right include (but are not limited to) supplies of the following goods or services:
- Milk, sugar, bread, cereals.
- Fiscal stamps.
- Newspapers, books, documentaries.
- Interest on government loans.
Importation of goods in Morocco gives rise to payment of importation duties, the VAT on importation, and the special tax on importation called Taxe Parafiscale à l’Importation (TPI).
Customs duties are computed on the basis of the ad valorem value of the goods at the time of their entrance into Morocco.
Customs duties can be reduced if the imported products are covered by free trade agreements signed by Morocco or other specific regulatory dispositions.
Under Moroccan tax law, the importation operations are subject to VAT at the rate of 20%. Lower rates of 7%, 10%, and 14% apply to specifically designated importations.
The Moroccan tax law also offers some economical customs regimes that provide VAT exemptions with credit (equivalent to zero rate).
The TPI rate is 0.25% levied on the value of the imported goods.
Excise taxes apply to specific products imported or produced in Morocco, such as tobacco, alcohol, and lubricants.
A professional tax is levied on individuals and enterprises that carry out a professional activity in Morocco.
The tax consists of a tax on the rental value of business premises (rented or owned) and fixed assets. The tax rates range from 10% to 30%, with exemption for the first five years of activity.
The rental value is exempted for the portion of cost exceeding MAD 50 million.
Registration duties are due on all written or verbal conventions, such as property transfer of real estate, shares, or rights; company set up; equity increase; and goodwill transfer.
The rates of registration duties range from 1% to 6%. A flat rate of MAD 200 is also applicable to specific operations and conventions.
The applicable rate for the transfer of goodwill is 6%.
Individual income tax on salaries is paid by way of withholdings made by resident employers.
Social security contributions
The only mandatory social security regime in Morocco is the one managed by the CNSS fund (Caisse Nationale de Sécurité Sociale).
The CNSS rates are as follows and apply to the gross salary, excluding exempted allowances and indemnities:
|Contribution||Employee portion (%)||Employer portion (%)||Computation basis ceiling (MAD)|
|Mandatory medical care||2.26||4.11||-|