In brief — Is your transaction subject to VAT in Morocco, exempt, or outside the scope? This article provides a 5-step decision tree to qualify any transaction for VAT purposes: nature, scope, voluntary registration, exemptions, and rates. Six practical cases illustrate the methodology. For instant qualification, use our interactive tool or download the Morocco VAT 2026 PDF guide. For a comprehensive overview, see our complete Morocco VAT guide.
VAT Decision Tree in 5 Steps
Qualifying a transaction under Moroccan VAT law means sequentially answering five questions. Each answer leads either to the next step or to a definitive conclusion.
Step 1 — Nature of the Transaction
The first question concerns the intrinsic nature of the transaction. Does the activity fall within the industrial, commercial, artisanal, service provision, or liberal profession domains? If yes, proceed to step 2. If the transaction is purely agricultural, constitutes a civil act, or has no commercial character, it falls outside the scope of VAT. The analysis stops here, unless the operator wishes to explore the voluntary registration option (step 3).
Step 2 — Scope of Application (Art. 89 GTC)
Article 89 of the General Tax Code exhaustively lists transactions that are compulsorily subject to VAT. Does the transaction appear on this list? If yes, proceed directly to step 4 to check for possible exemptions. If no, the transaction is not compulsorily taxable, but the operator may optionally register for VAT — proceed to step 3.
Step 3 — Voluntary Registration (Art. 90 GTC)
Article 90 allows certain operators outside the scope or exempt from VAT to voluntarily opt for VAT registration. Has the operator exercised this option? If yes, the operator enters the VAT scope — proceed to step 4. If no, the transaction remains outside the scope and no VAT applies. For more on this mechanism, see our detailed article on VAT voluntary registration Art. 90.
Step 4 — Exemptions
The transaction is now within the VAT scope. Does it benefit from an exemption? Three regimes coexist:
- Art. 91 — Exemptions without right to deduct (WRD): the transaction is exempt but input VAT is not recoverable. See WRD exemptions Art. 91.
- Art. 92 — Exemptions with right to deduct (RD): the transaction is exempt and input VAT remains recoverable. See RD exemptions Art. 92.
- Art. 94 — Suspensive regime: VAT is suspended under specific conditions. See VAT suspensive regime.
Some sectors also follow specific rules, such as the case of VAT on pharmaceutical products.
If no exemption applies, proceed to step 5.
Step 5 — Rate Determination
The transaction is taxable. Which rate applies? In 2026, the standard rate is 20% and applies to most transactions, including liberal professions (notaries, lawyers, chartered accountants, architects, etc.). The reduced rate of 10% applies to certain transactions listed in Art. 99-B of the GTC (catering, tourist accommodation, banking operations, urban transport and road transport of passengers and goods, certain food and energy products). Other modes of domestic transport have been subject to the 20% rate since 1 January 2026, and international transport is exempt with the right to deduct (Art. 92-I-35°). See full details in our article on the VAT reform 2024-2026.
Practical Case 1 — Export of Services
Situation: A consulting firm based in Casablanca invoices a strategic advisory engagement to a client located in France.
Analysis using the decision tree:
- Step 1: Service provision of a commercial nature — within the potential scope.
- Step 2: Service provision Art. 89 — compulsorily taxable transaction.
- Step 4: Export of services — exemption with right to deduct under Art. 92.
- Conclusion: No VAT invoiced to the French client. Input VAT on Moroccan expenses is fully recoverable.
For details, see VAT on export of services Morocco.
Practical Case 2 — Furnished Rental by an Individual
Situation: An individual rents out a furnished apartment in Casablanca through an online platform.
Analysis:
- Step 1: Service provision — commercial character.
- Step 2: Rental of furnished premises Art. 89-I-10°-a — transaction within the scope of VAT (if it is a genuine hotel-type accommodation service, the transaction falls under Art. 89-I-9°).
- Step 4: The landlord is an individual service provider; as long as annual turnover does not exceed 500,000 MAD, they are exempt without the right to deduct (Art. 91-II-3°). Above this threshold, they become a taxable person and can only cease to be one after three consecutive years below the threshold.
- Step 5: Above the threshold, standard rate of 20% for furnished rental (10% for accommodation transactions, Art. 99-B-1°).
- Conclusion: Below 500,000 MAD of annual receipts, the owner does not charge VAT and does not recover VAT on expenses. Above that, they must register, charge VAT (20% on furnished rental) and file periodic returns.
More details: Real estate rental and VAT regime.
Practical Case 3 — Farmer Selling Crops
Situation: A farmer sells his citrus production to a wholesaler.
Analysis:
- Step 1: Agricultural activity — outside the scope under Art. 87 of the GTC.
- Step 3: The option for VAT registration provided for in Art. 90 is exhaustive (exporters, small manufacturers and service providers under Art. 91-II-3°, resellers of goods in their original state, landlords of unfurnished professional premises): it is not open to a farmer for the sale of crops in their natural state.
- Conclusion: No VAT on the sale of the citrus fruit, and the VAT borne on inputs (other than exempt inputs such as fertilisers, Art. 92-I-4°) remains a cost. The farmer only enters the scope of VAT if they process their products (industrial activity) or, for their export turnover, if they opt in as an exporter (Art. 90-1°).
Full details: VAT and agriculture Morocco.
Practical Case 4 — Real Estate Developer and Social Housing
Situation: A property developer sells a 70 m² housing unit at a price of 280,000 MAD excluding tax.
Analysis:
- Step 1: Real estate development — commercial character.
- Step 2: Real estate development transaction Art. 89-I-4° — compulsorily taxable.
- Step 4: The exemption with right to deduct under Art. 92-I-28° requires a sale price not exceeding 250,000 MAD excluding tax and a covered surface area between 50 and 80 m². At 280,000 MAD excluding tax, the price is above this threshold: the “social housing” exemption does not apply.
- Step 5: Standard rate of 20%.
- Conclusion: The sale is taxable at 20%. The developer charges VAT to the buyer; input VAT on construction works is recoverable under the ordinary rules.
See VAT for real estate developers and land developers.
Practical Case 5 — Self-Employed Hairdresser
Situation: A hairdresser under the auto-entrepreneur status generates annual turnover of 200,000 MAD.
Analysis:
- Step 1: Service provision — commercial character.
- Step 2: Normally within the scope of Art. 89.
- However, as an individual service provider whose annual turnover does not exceed 500,000 MAD, the auto-entrepreneur is exempt without the right to deduct (Art. 91-II-3° of the GTC). The ceilings specific to the auto-entrepreneur status (500,000 MAD for commerce, industry and crafts, 200,000 MAD for services — Art. 42 ter) belong to income tax and, in practice, ensure that this VAT threshold is never exceeded.
- Conclusion: No VAT to charge or declare. The auto-entrepreneur cannot recover input VAT on purchases.
Learn more: VAT and auto-entrepreneur Morocco.
Practical Case 6 — Foreign SaaS Provider Billing a Moroccan Company
Situation: A US-based company provides a SaaS subscription (cloud software) to a Moroccan LLC (SARL).
Analysis:
- Step 1: Digital service — commercial character.
- Step 2: Service consumed in Morocco — territoriality under Art. 88 of the GTC.
- The supplier being a non-resident, the reverse charge mechanism under Art. 115 applies: the Moroccan client calculates, declares, and pays the VAT.
- Step 5: Standard rate of 20%.
- Conclusion: The Moroccan LLC must reverse-charge VAT at 20% on the amount of the foreign invoice. If the company has full right to deduct, the reverse-charged VAT is simultaneously deductible.
See VAT reverse charge Morocco and VAT on digital services Morocco.
Legal References
- General Tax Code (GTC) — Articles 87 to 125, Title III
- Circular Note 717 — Commentary on VAT provisions
- Morocco VAT 2026 Practical Guide — Download the PDF
Interactive Tool
Use our online VAT qualification tool to walk through the decision tree interactively and obtain a personalised result in under 2 minutes.
FAQ
How do I know if a transaction falls within Morocco’s VAT scope?
Start by consulting Article 89 of the GTC, which lists compulsorily taxable transactions (sales, service provisions, imports, construction works, etc.). If the transaction is not listed, check whether the operator has exercised the voluntary registration option under Article 90. Without inclusion in Art. 89 and without an Art. 90 option, the transaction is outside the scope.
How many VAT rates exist in Morocco in 2026?
Since 1 January 2026, only two rates remain: the standard rate of 20% and the reduced rate of 10%. The 2024-2026 transitional period is over: the former intermediate rates of 14% and 7% have been phased out.
Does an auto-entrepreneur have to charge VAT?
No. An auto-entrepreneur providing services or manufacturing is an individual whose annual turnover does not exceed 500,000 MAD: they are exempt without the right to deduct (Art. 91-II-3° of the GTC). An auto-entrepreneur trading as a reseller of goods in their original state is not a taxable person below 2,000,000 MAD (Art. 89-I-2°-b). The ceilings of the status (500,000 MAD for commercial, industrial and artisanal activities, 200,000 MAD for services — Art. 42 ter-II-A) belong to income tax, not VAT. In return, input VAT on purchases cannot be deducted.
