In brief: The auto-entrepreneur in Morocco carries out an activity outside the scope of VAT as long as their turnover remains below the legal thresholds (500,000 MAD for commercial/industrial/artisanal activities, 200,000 MAD for services). This status means they do not charge VAT, do not file VAT returns and cannot deduct VAT on their purchases. If the thresholds are exceeded, registration under the standard VAT regime becomes mandatory.
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The auto-entrepreneur is out of scope, not exempt
The distinction is fundamental in Moroccan tax law. The auto-entrepreneur is not a taxable person benefiting from an exemption: they are simply outside the scope of application of VAT. The exemptions provided for in articles 91 and 92 of the General Tax Code concern transactions that are within the scope of VAT but which the legislator has decided to exempt from taxation. The auto-entrepreneur’s status is different: they do not fall within the VAT mechanism.
This distinction is not purely theoretical. It has important practical consequences:
- Out of scope: the auto-entrepreneur has no filing obligation in VAT matters, no collection, no deduction. They do not fall within the scope of the tax.
- Exempt (art. 91 or 92): an exempt taxable person is within the scope of VAT but exempted from collecting it. They may, in certain cases (art. 92), deduct the VAT borne upstream.
To determine the VAT regime applicable to a specific transaction, use the VAT qualification tool.
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Turnover thresholds
The auto-entrepreneur status is governed by annual turnover ceilings. As long as the auto-entrepreneur respects these thresholds, they remain outside the scope of VAT:
| Type of activity | Annual turnover threshold |
|---|---|
| Commercial, industrial and artisanal activities | 500,000 MAD |
| Services | 200,000 MAD |
These thresholds are assessed on the basis of annual turnover collected. An auto-entrepreneur carrying out both a commercial and a service activity simultaneously must respect both thresholds for each category.
These thresholds should not be confused with that of article 91-II-3° of the CGI, which provides for an exemption without right to deduction for individual manufacturers and service providers whose turnover is equal to or below 500,000 MAD (excluding liberal professions). The latter provision concerns operators who are within the scope of VAT but below the effective registration threshold.
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Practical consequences of out-of-scope status
No VAT invoicing
The auto-entrepreneur does not show VAT on their invoices. Their invoices are issued in gross amounts, with no excl. VAT/incl. VAT distinction, since there is simply no applicable VAT. The mention “VAT not applicable — out-of-scope activity” or equivalent may be added for clarity.
No right to deduction
The auto-entrepreneur cannot deduct the VAT borne on their purchases of goods, services or investments. The VAT paid to their suppliers constitutes a definitive cost, included in their expenses. This means the price inclusive of VAT is the actual price for the auto-entrepreneur.
No VAT return
The auto-entrepreneur is not subject to any filing obligation in VAT matters: neither monthly nor quarterly returns on the SIMPL portal. Their tax obligations are limited to declaring their turnover for income tax purposes (single professional contribution).
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Impact on taxable clients
The auto-entrepreneur’s out-of-scope status has a direct impact on their clients who are liable for VAT. When a taxable business purchases goods or services from an auto-entrepreneur:
- No deductible VAT: since the auto-entrepreneur’s invoice does not show VAT, the taxable client cannot recover any VAT on this purchase. The invoiced amount constitutes a net expense.
- No withholding: the VAT withholding mechanisms (reverse charge) do not apply to transactions carried out by out-of-scope operators.
For businesses with a large volume of purchases, this absence of right to deduction can represent a real additional cost compared to a taxable supplier. This is one of the reasons why some auto-entrepreneurs choose to opt voluntarily for registration.
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Exceeding the thresholds: mandatory registration
When the auto-entrepreneur’s turnover exceeds the legal thresholds (500,000 MAD or 200,000 MAD depending on the activity), the situation changes radically:
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Loss of auto-entrepreneur status: exceeding the threshold triggers exit from the auto-entrepreneur regime. The operator must register under the standard tax regime.
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Mandatory VAT registration: the operator enters the scope of VAT and becomes liable. They must register with the tax administration, collect VAT at the applicable rate (20% or 10% depending on the nature of the transaction) and file their VAT returns on the SIMPL portal.
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Enhanced accounting obligations: registration requires the keeping of regular accounts, the issuance of invoices compliant with CGI requirements (mandatory information, numbering, tax identification number) and the retention of supporting documents.
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Right to deduction: in return, the registered operator can now deduct the VAT borne on their purchases of goods, services and investments, under the conditions provided for by the CGI.
The threshold is assessed during a calendar year. The auto-entrepreneur who observes that their turnover is going to exceed the thresholds must anticipate the transition and consult a chartered accountant to organise the changeover under the best conditions.
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Voluntary option for VAT registration (art. 90 of the CGI)
Article 90 of the General Tax Code allows certain exempt or out-of-scope persons to opt voluntarily for VAT registration. An auto-entrepreneur may find it advantageous to exercise this option in several scenarios:
Why opt in?
- Clientele mainly composed of taxable persons: if the auto-entrepreneur’s clients are businesses liable for VAT, they prefer taxable suppliers who allow them to recover VAT. The option makes the auto-entrepreneur more competitive.
- Significant investments to make: the option allows deduction of VAT on purchases of equipment, supplies or materials. For an auto-entrepreneur who needs to invest (professional vehicle, IT equipment, premises fitting), the VAT saving can be significant.
- Taxable suppliers: if most purchases are from taxable suppliers (who charge VAT), the option allows recovery of this VAT which would otherwise be a definitive cost.
Conditions and modalities
For more details on the option modalities, see our detailed article on voluntary VAT registration (art. 90). In summary:
- The application is filed with the local tax office (by registered letter or in person).
- The option takes effect 30 days after the filing date.
- It is maintained for a minimum period of 3 consecutive years.
- The option may be global or partial (one activity, one client, one transaction).
- In case of renunciation, adjustments are mandatory (repayment of VAT deducted on non-depreciated fixed assets, stock adjustment).
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Reference texts: General Tax Code 2026 (PDF) — Circular Note No. 717 — VAT (Volume 2) — Circular Note No. 730 (FL 2020)
— 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
Does an auto-entrepreneur charge VAT?
No. The auto-entrepreneur carries out an activity outside the scope of VAT as long as their turnover remains below the legal thresholds (500,000 MAD for commercial/industrial/artisanal activities, 200,000 MAD for services). Their invoices therefore do not show VAT. This is not an exemption within the meaning of articles 91 or 92 of the CGI, but an exclusion from the scope of the tax.
What happens if I exceed the turnover threshold?
Exceeding the thresholds triggers the loss of auto-entrepreneur status and the obligation to register under the standard tax regime. The operator becomes liable for VAT: they must register, collect VAT at the applicable rate (20% or 10%), file VAT returns and keep regular accounts. In return, they acquire the right to deduct the VAT borne on their purchases.
Can I voluntarily opt for VAT registration?
Yes. Article 90 of the CGI allows voluntary registration, even if the operator is out of scope. The option is advantageous when the clientele is mainly composed of taxable persons (who wish to recover VAT) or when the auto-entrepreneur makes significant investments. The option is valid for a minimum of 3 years. For more details, see our article on voluntary VAT registration (art. 90).
Can taxable clients recover VAT on my invoices?
No. Since the auto-entrepreneur is out of scope and does not charge VAT, their taxable clients have no deductible VAT on these purchases. The amount invoiced by the auto-entrepreneur constitutes a net expense for the client. This is a point to anticipate in the business relationship, as it can make the auto-entrepreneur less competitive compared to taxable suppliers who allow VAT recovery.
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