In brief: Agriculture is a civil act outside the scope of VAT in Morocco (art. 87 of the CGI), and not “exempt”. The farmer is not a taxable person, does not charge VAT and does not recover input VAT; the registration option (art. 90) is open to them only for their export turnover (art. 90-1°) or if they process their products (art. 90-2°). Agricultural equipment is, depending on the CGI list, exempt with right to deduction (art. 92-I-5°) or taxed at 10% (art. 99-B-1°); fertilisers and phytosanitary products are exempt with right to deduction (art. 92). Check the regime applicable to your transaction with the VAT qualification tool.
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Agriculture: a civil act outside the scope of VAT
This is the most important and most frequently misunderstood point: agricultural activity is outside the scope of VAT in Morocco. It is not “exempt”.
The distinction has fundamental legal significance:
| Concept | Definition | Consequence |
|---|---|---|
| Out of scope | The transaction does not fall within the VAT perimeter | No registration, no filing, no right to deduction |
| Exempt (art. 91 or 92) | The transaction is within scope but exempted from VAT by the legislator | Filing obligations, right to deduction depending on the case |
Circular No. 717 (Volume 2, VAT) is explicit: the sale by a farmer of the products of their harvest in their natural state or obtained after a transformation that falls within the normal extension of their agricultural activity constitutes a civil act outside the scope of VAT, which covers only transactions of an industrial, commercial, artisanal or liberal nature (art. 87 of the CGI 2026).
In practice, this means the farmer:
- Does not charge VAT to their clients
- Does not file VAT returns with the tax administration
- Does not recover VAT paid on their purchases (equipment, inputs, services)
- Does not appear in the VAT system as a taxable person
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Out of scope does not mean out of scope in all circumstances
The “out of scope” classification only applies to strictly agricultural transactions. As soon as the farmer goes beyond the normal course of their activity, they enter the scope of VAT:
- Industrial transformation: A farmer who transforms their products by an industrial process (canning, industrial freezing, commercial packaging) becomes a “manufacturer” within the meaning of art. 89-I-1° of the CGI and is subject to VAT.
- Services to third parties: A farmer who leases their agricultural equipment to other operators or transports goods on behalf of third parties carries out transactions within the scope of VAT.
- Commercial activity: Purchasing agricultural products from other operators for resale (without transformation as part of their own farming) constitutes a taxable commercial transaction, subject to registration thresholds.
Practical examples from Circular 717:
- A livestock farmer who sells butter and cheese produced from the milk of their own herd: out of scope (normal course of agricultural activity).
- A livestock farmer who buys milk from other producers and transforms it into butter for sale: within scope (manufacturing activity).
- A beekeeper who sells their honey as is: out of scope. If they package it with commercial presentation: within scope.
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Voluntary registration option (art. 90)
Although agriculture is out of scope, the CGI provides in article 90 the possibility for certain operators to opt voluntarily for VAT registration. Article 90 is, however, exhaustive: the operator may only opt in respect of their export turnover (art. 90-1°) or, if they process their products, as a manufacturer referred to in article 91-II-3° (art. 90-2°). Selling the crop in its natural state on the domestic market does not give rise to the option.
Operators carrying out exports
Operators who export their agricultural products can opt for registration (art. 90-1°). The benefit is twofold:
- Purchases under VAT suspension (art. 94): the operator can acquire inputs without paying upstream VAT, within the limit of their export turnover from the previous year.
- VAT credit refund (art. 103): VAT paid on purchases can be recovered, since export is exempt with right to deduction (art. 92-I-1°).
Operators making a heavy investment
An operator who sells their production in its natural state cannot opt merely because they invest heavily: the article 90 option is not open to out-of-scope agricultural activity. VAT on their investments therefore remains a cost, except for equipment intended for exclusively agricultural use, which is exempt with right to deduction (art. 92-I-5°) and thus supplied without VAT. Only an operator who processes their products (industrial activity within the scope of VAT) or who exports may, on that basis, opt and recover upstream VAT; the option is then maintained for a minimum period of 3 years and entails all the filing and accounting obligations of an ordinary taxable person.
Option modalities: application by registered letter to the local tax office, effective within 30 days.
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Essential agricultural products: exempt without right to deduction (art. 91)
When basic agricultural products are sold by operators within the scope of VAT (traders, wholesalers, manufacturers), they benefit from the exemption without right to deduction provided for in article 91-I-A of the CGI:
| Product | VAT regime 2026 | Source |
|---|---|---|
| Wheat, barley, cereals (human food) | Exempt WORD (art. 91-I-A-1°) | C.717 |
| Flour, semolina, couscous | Exempt WORD (art. 91-I-A-1°) | C.717 |
| Fresh milk, cream | Exempt WORD (art. 91-I-A-2°) | C.717 |
| Butter derived from animal milk | Exempt WORD (art. 91-I-A-2°) | CN 735 |
| Raw sugar (beet, cane) | Exempt WORD (art. 91-I-A-3°) | C.717 |
| Fresh or frozen meat (seasoned or not) | Exempt WORD (art. 91-I-A-6°) | CN 736 |
| Fishery products (fresh or frozen) | Exempt WORD (art. 91-I-A-5°) | C.717 |
| Artisanal olive oil | Exempt WORD (art. 91-I-A-7°) | C.717 |
| Short pasta, uncooked and unstuffed | Exempt WORD (art. 91-I-A-1°) | CGI 2026 (FL 2026) |
| Other pasta | 10% WRD (art. 99-B-1°) | CGI 2026 (FL 2026) |
Refined sugar falls under the reduced rate of 10% (art. 99-B-1°), after a progressive transition from the former 7% rate (abolished) to 10% between 2024 and 2026.
To check the applicable regime for a specific product, use our VAT qualification tool.
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Agricultural equipment: exemption or 10% rate depending on the CGI list
The CGI 2026 divides equipment for exclusively agricultural use between two regimes:
Exempt with right to deduction (art. 92-I-5°) — the supplier does not charge VAT, subject to the regulatory formalities (application, commitment to agricultural use):
- Tractors (wheeled and tracked) and motor cultivators
- Soil preparation and sowing equipment: ploughs, harrows, chisels, tine cultivators, ridgers, hillers and hoes, simple or combined seed drills, planters and transplanters, fertiliser spreaders
- Harvesting equipment: reaper-binders, rotary or reciprocating mowers, disc mowers, mower-conditioners, pick-up balers, stationary threshers, forage harvesters, vegetable harvesters, shellers
- Livestock and milking equipment: bucket and mobile milking units, milking parlours, churns, cream separators, refrigerated tanks
- Beekeeping equipment: foundation embossing machines, honey extractors, ripeners
- Localised irrigation equipment: head and filtration station, supply network (PVC, HDPE, LDPE pipes), drippers, micro-jets, diffusers, connection fittings
- Animal and plant genetic material, phytosanitary products, fertilisers and fertilising materials (see next section)
Reduced rate of 10% with right to deduction (art. 99-B-1°):
- Retarvator (rotary tiller), sweep, rodweeder, cover crop, subsoilers, stubble plough, towed agricultural rollers
- Combine harvesters, harvesters, seed pick-ups, sugar cane and beet loaders, tedder rakes and rotary swathers, straw choppers
- Mobile pivots, anti-frost fans, anti-hail cannons, water retention polymers for soils
- Manure and slurry spreaders, automatic drinkers, hedge trimmers, defoliators, stone pickers, steam-jet soil disinfection devices, liquid nitrogen containers
- Livestock and poultry feed and the oil cakes used in their manufacture (excluding simple feed: cereals, milling by-products, pulps, spent grains, straw)
Equipment that appears on neither list (greenhouse shelters, motor pumps, unlisted sprinkler equipment, for example) falls under the standard rate of 20%. These two lists have not been modified by the 2024-2026 reform. The applicable regime for a specific piece of equipment can be checked with the VAT qualification tool.
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Fertilisers and phytosanitary products: exempt with right to deduction (art. 92)
Agricultural inputs benefit from particularly favourable tax treatment, provided for in article 92 of the CGI:
Fertilisers and fertilising materials (art. 92-I-3° and I-4°)
Fertilisers (natural, nitrogen, phosphate, potassium), fertilising materials and growing media for agricultural use are exempt with right to deduction both domestically and at import.
The FL 2026 (CN 737) extended this exemption to fertilising materials and growing media within the meaning of law no. 53-18:
- Fertilising material: substance or mixture intended to provide plants with nutritional elements or to improve their nutritional efficiency
- Growing medium: material serving as a growing medium for plants (anchoring and contact with nutritive solutions)
Fertiliser-antiparasitic mixtures are exempt if fertilisers predominate (greater than 50%).
Phytosanitary products and agricultural equipment (art. 92-I-5°)
Phytosanitary products, along with the list of agricultural equipment in art. 92-I-5° (tractors, ploughs, seed drills, milking equipment, drip micro-irrigation equipment, etc.), are also exempt with right to deduction; water retention polymers, on the other hand, fall under the 10% rate (art. 99-B-1°).
Formalities (CN 737): electronic application, pro forma invoice, descriptive statement, commitment to exclusively agricultural use. The administration issues an import exemption certificate.
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Impact of the 2024-2026 VAT reform on agriculture
The 2024-2026 VAT reform did not change agriculture’s out-of-scope status. However, it led to several important reclassifications for agricultural and agri-food products:
| Product | Former regime | New regime 2026 | Source |
|---|---|---|---|
| Butter (except artisanal) | Former rate of 14%, abolished | Exempt WORD (art. 91) | CN 735 |
| Refined sugar | Former rate of 7%, abolished | 10% (transition 8%→9%→10%) | CN 735 |
| Short pasta, uncooked and unstuffed | Former rate of 7%, abolished | Exempt WORD (art. 91-I-A-1°) | CN 737 |
| Fertilising materials | Variable | Exempt WRD (art. 92) | CN 737 |
| Canned sardines | Former rate of 7%, abolished | Exempt WORD (art. 91) | CN 735 |
The convergence towards two rates (20% standard and 10% reduced) also simplifies VAT management for agri-food operators within the scope of VAT. Other sectors underwent comparable reclassifications during this reform, such as VAT on pharmaceutical products.
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Reference texts: General Tax Code 2026 (PDF) — Circular Note No. 717 — VAT (Volume 2) — Circular Note No. 735 (FL 2024) — Circular Note No. 737 (FL 2026)
— TOOLS
VAT Qualification Morocco 2026 — Free tool: Determine in just a few clicks whether your transaction is outside scope, exempt or taxable, and at what rate. Compliant with the 2026 CGI.
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FAQ
Is the farmer liable for VAT in Morocco?
No. Agricultural activity is a civil act outside the scope of VAT (art. 87 of the CGI). The farmer is not a taxable person: they do not collect VAT, do not file returns and do not deduct it. This status should not be confused with exemption (art. 91 or 92), which concerns transactions within the scope but exempted from taxation. The registration option (art. 90) is open to them only for their export turnover (art. 90-1°) or if they process their products (art. 90-2°); it cannot be exercised for the sole purpose of recovering VAT on their investments.
Is agricultural equipment subject to VAT?
It depends on the CGI list in which it appears. A first list of equipment for exclusively agricultural use (tractors, ploughs, harrows, seed drills, reaper-binders, milking equipment, localised irrigation equipment, etc.) is exempt with right to deduction (art. 92-I-5°). A second list (combine harvesters, mobile pivots, cover crop, manure spreaders, water retention polymers, etc.) falls under the reduced rate of 10% with right to deduction (art. 99-B-1°). Livestock and poultry feed, as well as oil cakes, are also at 10%. Equipment absent from both lists (greenhouse shelters, motor pumps) is subject to the standard rate of 20%. However, fertilisers, fertilising materials, phytosanitary products and drip micro-irrigation equipment benefit from exemption with right to deduction (art. 92).
Are fertilisers and phytosanitary products exempt from VAT?
Yes. Fertilisers, fertilising materials, growing media and phytosanitary products are exempt with right to deduction (art. 92-I-3°, I-4° and I-5° of the CGI). This means the supplier does not charge VAT and the operator bears no tax. The FL 2026 (CN 737) extended this exemption to fertilising materials and growing media within the meaning of law no. 53-18. Specific formalities apply (electronic application, commitment to agricultural use).
Can a farmer recover VAT on their purchases?
In principle, no. Being out of scope, the farmer has no right to deduct VAT paid upstream. This is the counterpart of non-registration. However, two mechanisms can mitigate this cost: (1) for exporting or processing operators only, the registration option (art. 90-1° and 2°), which gives access to the right to deduction but imposes all the obligations of a taxable person for at least 3 years; (2) the exemption with right to deduction on fertilisers and phytosanitary equipment (art. 92), which allows suppliers to sell without VAT, thus reducing the final cost for the farmer.
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