In brief: Agriculture is a civil act outside the scope of VAT in Morocco (art. 89 of the CGI), and not “exempt”. The farmer is not a taxable person, does not charge VAT and does not recover input VAT — unless they exercise the voluntary registration option (art. 90). Agricultural equipment is taxed at 10%, 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 of harvest products in their natural state or after transformation in the normal course of agricultural activity constitutes a civil act outside the scope of VAT (art. 89 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. This option has practical value in two main situations:
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 with heavy upstream investment
An operator who invests heavily in equipment, buildings or installations may find it advantageous to opt in order to recover upstream VAT. The option is maintained for a minimum period of 3 years and entails all the filing and accounting obligations of an ordinary taxable person. The trade-off between remaining outside the scope and opting in is assessed case by case and typically falls within the scope of tax law advisory.
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 |
| Common wheat pasta (short, unfilled) | Exempt WORD (art. 91-I-A-1°) | CN 737 |
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: reduced rate of 10%
Equipment and machinery for exclusively agricultural use are subject to the reduced rate of 10% with right to deduction (art. 99-B-1° of the CGI). The list, detailed in Circular No. 717, is extensive:
- Agricultural tractors and motor cultivators
- Ploughing equipment: ploughs, harrows, cultivators, seeders
- Harvesting equipment: combine harvesters, mowers, fodder presses
- Irrigation equipment: motor pumps, sprinkler irrigation equipment
- Milking equipment and honey extractors
- Greenhouse shelters and agricultural tunnels
- Livestock and poultry feed, oil cakes: 10% (art. 99-B-1°)
This 10% rate is unchanged by the 2024-2026 reform. Agricultural equipment already benefited from this reduced rate before the reform.
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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 an extensive list of agricultural equipment (drip micro-irrigation equipment, water retention polymers, etc.), are also exempt with right to deduction.
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 |
| Common wheat pasta | Former rate of 7%, abolished | Exempt WORD (art. 91) | 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. 89 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. However, the farmer may opt voluntarily for registration (art. 90), particularly if they export or wish to recover VAT on their investments.
Is agricultural equipment subject to VAT?
Yes, but at a reduced rate. Equipment and machinery for exclusively agricultural use (tractors, combine harvesters, irrigation equipment, greenhouse shelters) are subject to 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%. 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) the voluntary registration option (art. 90), 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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