In brief: Under Article 146 of the CGI, the Moroccan Tax Authority can reject expense deductions when invoices lack mandatory information (ICE, IF, RC) or come from non-compliant suppliers. Cash payments are limited to 5,000 MAD/day and 50,000 MAD/month per supplier.
With over 15 years of experience advising companies on tax compliance and audit preparation, Upsilon Consulting’s chartered accountants provide authoritative guidance on purchase documentation requirements.
Supporting Documents for Purchases: Article 146 of the General Tax Code
Under the provisions of Article 146 of the General Tax Code, the Tax Authority has the right to reject the deduction of an expense when the purchase is made from a non-compliant supplier. It may also challenge the deduction of VAT. Therefore, it is the taxpayer’s responsibility to verify that the suppliers they use are actually conducting business. This is not easy to manage, but it is the law. This is a risk that should be included in the risk mapping for the procurement process.
Supporting documents for purchases are one of the cornerstones of tax compliance in Morocco. Without adequate documentation, a company faces significant tax reassessments during an audit. This article details the requirements of Article 146, mandatory invoice information, cash payment thresholds and best practices for document archiving.
Article 146 — Supporting Documents for Expenses
Any purchase of goods or services that a company makes from a supplier must:
- First, correspond to an actual expense;
- Second, give rise to a proper and substantiated invoice issued in the name of the purchaser.
The invoice must include the information required under Article 145 of the General Tax Code. Purchase amounts, work and services not supported by a proper invoice or any other substantiating document issued in the name of the taxpayer are not deductible from taxable income.
When the Tax Authority finds that an invoice has been issued by a supplier:
- who does not comply with tax filing and payment obligations;
- who does not have an actual business activity
It may reject the deduction corresponding to that invoice. Article 145 provides that the Tax Authority shall make available to taxpayers a list of non-compliant suppliers. This list is published on its website.
However, the Authority can only establish this list after a court ruling against the supplier.
In practice, the Tax Authority rejects the supporting documents of certain suppliers even in the absence of this list.
Mandatory Information on Invoices
For an invoice to be considered proper and substantiated under Article 146 of the General Tax Code, it must contain the following mandatory information as required by Article 145:
- Name or company name of the supplier and the customer;
- Common Enterprise Identifier (ICE): a 15-digit number mandatory since 2018;
- Tax Identification Number (IF) of the supplier;
- Trade Register Number (RC);
- Business Tax Number (patente);
- VAT identification number where applicable;
- Amount excluding tax (HT) and amount including tax (TTC);
- VAT rate and amount applied;
- Date and invoice number;
- Nature of goods or services provided.
The absence of any of these elements may lead to the invoice being rejected during a tax audit. The ICE, in particular, has become essential: any invoice without an ICE is considered irregular by the Tax Authority.
Cash Payment Thresholds and Restrictions
Article 146 of the General Tax Code imposes strict restrictions on cash payments. Expenses whose payment is not evidenced by a crossed non-endorsable cheque, bill of exchange, magnetic payment means, bank transfer, electronic process or offset are only deductible up to a limit of:
- 5,000 dirhams per day per supplier;
- 50,000 dirhams per month per supplier.
Beyond these thresholds, the amount paid in cash is not deductible from taxable income. Likewise, depreciation charges on fixed assets acquired under these conditions are not deductible.
This provision aims to combat the informal economy and ensure transaction traceability. For significant purchases, it is therefore essential to use banking payment methods: bank transfers, crossed cheques or electronic payments.
Consequences of Non-Compliance: Tax Reassessment
Failure to comply with the requirements of Article 146 of the General Tax Code can lead to significant financial consequences for the company:
- Expense reintegration: the purchase amount is added back to the taxable result, increasing the corporate tax or income tax base;
- Rejection of input VAT: VAT recovered on the irregular invoice must be repaid, plus penalties;
- Fines and surcharges: late payment penalties of 15% for the first year, then 0.50% per additional month, are added to any reassessments;
- Risk of total rejection of accounts: when irregularities accumulate, the Tax Authority may reject the entire accounting records and proceed with a turnover reconstruction.
These consequences can be particularly severe during a tax audit. It is therefore essential to verify the regularity of each supporting document before recording it.
Types of Accepted Supporting Documents
Beyond the invoice itself, several documents can serve as supporting evidence to substantiate a purchase transaction:
- Invoices: the primary document, compliant with Article 145 requirements;
- Purchase orders: proof of the formal request sent to the supplier;
- Delivery notes: attest to the actual receipt of goods or services;
- Contracts: govern the business relationship, particularly for service provisions;
- Bank statements: prove that payment was actually made through banking channels;
- Goods receipt notes: confirm stock entry of merchandise.
Combining these documents strengthens the credibility of the accounting records in the eyes of the Tax Authority. The more complete the file, the lower the risk of reassessment.
How to Protect Yourself Against the Risk of Fraudulent Supporting Documents?
Here are best practices to reduce the risk of rejection of purchase supporting documents:
- Refuse invoices issued through intermediaries. The company must require the service provider to issue their own invoice. In practice, companies sometimes accept invoices from the supplier’s own suppliers. This practice must be avoided;
- Verify the actual existence of your supplier and compile a file containing:
- The supplier’s legal documentation (articles of association, minutes, registration certificate);
- The tax identification numbers of their company (IF, ICE, patente, RC);
- Verification of financial statement filings with the commercial court;
- For large amounts, a tax clearance certificate;
- Document the business relationship beyond just the invoice: contract, purchase order, delivery note, acceptance report;
- Prefer well-established suppliers with a proven track record;
- Verify the supplier’s resources are adequate for the proposed service (human resources, technical capabilities);
- Require compliant invoices that include all mandatory information, especially the ICE.
Common Mistakes During Tax Audits
Tax inspectors regularly identify the same types of irregularities during audits:
- Invoices without ICE or with an incorrect ICE;
- Cash payments exceeding authorised thresholds (5,000 MAD/day, 50,000 MAD/month);
- Accommodation invoices issued by fictitious suppliers or those without actual business activity;
- Missing delivery notes to substantiate the receipt of goods;
- Inconsistency between supplier type and invoiced service (for example, a construction materials supplier billing for consultancy);
- Undated or unnumbered invoices;
- Discrepancy between invoiced amounts and amounts paid.
Each of these errors can trigger a reassessment. Vigilance must be ongoing, starting from the moment the invoice is received, not only at the time of a tax audit.
Document Archiving: Duration and Best Practices
Moroccan law requires that accounting supporting documents be retained for 10 years from the closing date of the financial year to which they relate. This period applies to invoices, purchase orders, delivery notes, contracts and all other substantiating documents.
Best practices for archiving include:
- Chronological and supplier-based filing to facilitate retrieval during an audit;
- Document scanning with a secure backup system;
- Systematic reconciliation between invoices, delivery notes and payments;
- Preservation of originals in a secure, moisture-free location.
Electronic Invoicing: Moving Towards Digitalisation in 2026
Morocco is progressively moving towards electronic invoicing, which should simplify the management of purchase supporting documents. Electronic invoicing will have the advantage of guaranteeing data integrity, automating compliance checks (ICE, IF, VAT) and reducing the risk of fraud.
Moroccan companies should start preparing for this transition now by modernising their accounting information systems and training their teams in new practices.
To improve the quality of your accounting and tax filings, work with a professional. Contact Upsilon Consulting.
Frequently Asked Questions
What information must a purchase invoice contain under Moroccan tax law?
Under Article 145 of the General Tax Code, every invoice must include the supplier’s and customer’s names, the Common Enterprise Identifier (ICE), the Tax Identification Number (IF), Trade Register Number, Business Tax Number, VAT identification number, amounts excluding and including tax, VAT rate and amount, date, invoice number, and the nature of goods or services. Missing any of these elements may lead to the invoice being rejected during a tax audit.
What are the cash payment limits for business purchases in Morocco?
Article 146 of the General Tax Code restricts cash payments to 5,000 dirhams per day per supplier and 50,000 dirhams per month per supplier. Amounts exceeding these thresholds paid in cash are not deductible from taxable income. Businesses should use bank transfers, crossed cheques, or electronic payments for significant purchases to ensure full deductibility.
What happens if supporting documents are rejected during a tax audit?
If the tax authority rejects supporting documents, the purchase amount is added back to the taxable result, increasing the corporate tax base. Additionally, recovered VAT on irregular invoices must be repaid with penalties, and late payment surcharges of 15% for the first year plus 0.50% per additional month apply. In severe cases, accumulated irregularities can lead to a total rejection of accounting records.
How long must purchase supporting documents be retained in Morocco?
Under Moroccan tax law, businesses must retain all purchase supporting documents for a minimum of ten years from the date of the transaction. This obligation applies to invoices, delivery notes, payment receipts, and any other accounting records that justify deductible expenses. Proper archiving, whether physical or digital, is essential to respond effectively to any tax audit and avoid the reassessment of previously deducted charges.
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