In brief: Article 91 of the General Tax Code (CGI) lists the transactions exempt from VAT without right to deduction (WORD). The operator does not charge VAT to their customers, but cannot recover the VAT paid to their suppliers either: this is the blocking effect (effet de butoir). This regime differs from the exemption with right to deduction (art. 92) and from out-of-scope transactions. To find out which regime applies to your activity, use our VAT qualification tool.
Principle of exemption without right to deduction
Exemption without right to deduction means that the transaction in question falls within the scope of VAT, but the legislator exempts it for social, cultural or economic reasons (accessibility of essential goods, healthcare, education, etc.).
In practice, an operator benefiting from article 91:
- Does not charge VAT on their exempt sales or services;
- Does not deduct the VAT paid upstream on their purchases, investments and overheads.
The VAT borne upstream therefore becomes a definitive cost integrated into the cost price. This is called the blocking effect (see the dedicated section below).
Exemptions are of restrictive application and cannot be extended by analogy to transactions not expressly covered by the Code (Circular 717).
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Legal distinction: out of scope, exempt WORD, exempt WRD
It is essential not to confuse these three regimes. Although the apparent result is sometimes similar (no VAT charged), the legal and accounting consequences differ.
| Criterion | Out of scope | Exempt WORD (art. 91) | Exempt WRD (art. 92) |
|---|---|---|---|
| VAT status | Outside the scope of application | Within scope, but exempted | Within scope, but exempted |
| VAT charged to customer | No | No | No |
| Input VAT recoverable | No | No | Yes |
| VAT return | No obligation | Possible filing obligation | Filing obligation |
| VAT credit refund | Impossible | Impossible | Possible (art. 103) |
| Deduction prorata | Numerator: no | Denominator only | Numerator + denominator |
| Examples | Agriculture, civil acts, auto-entrepreneurs below threshold | Bread, milk, raw sugar, small manufacturers | Export, pharmaceutical products, fertilisers |
| Legal basis | Art. 87-88 CGI (exclusion) | Art. 91 CGI | Art. 92 CGI |
For a taxable person carrying out both taxable and WORD-exempt transactions, deductible VAT is subject to a deduction prorata (art. 104 of the CGI).
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Art. 91-I-A: Essential goods
The core of article 91 concerns basic food products, exempted to protect household purchasing power. Here is the complete list as it stands under the 2026 CGI.
1. Bread, couscous, semolina, flour, cereals and bread-making yeast
Sales (other than for on-premises consumption) of bread, couscous, semolina and flour used for human food, cereals used in the manufacture of these flours, and yeasts used in bread-making are exempt (art. 91-I-A-1).
Important clarifications:
- Bread means the product containing only flour, yeast, water and salt. Rusks, pretzels, biscuits and pastries are excluded.
- Since 01/01/2025 (FL 2025, CN 736), dry yeast is excluded from the exemption and subject to the 20% rate. Only fresh/natural yeasts remain exempt.
- Since 01/01/2026 (FL 2026, CN 737), short uncooked and unfilled pasta made from soft (common) wheat is added to this exemption: penne, fusilli, farfalle, macaroni, rigatoni, coquillettes. However, long pasta (spaghetti, tagliatelle, linguine, lasagne) remains subject to the 10% rate, as do filled pasta (ravioli, tortellini).
2. Milk, cream and butter
Milk (fresh, preserved, concentrated, sweetened or not), cream, special infant milk and artisanal non-packaged butter are exempt (art. 91-I-A-2).
Since 01/01/2024 (FL 2024, CN 735), butter derived from animal milk — formerly subject to the 14% rate — is exempt WORD. The exemption covers cow, goat, buffalo or other mammal butter.
Dairy products (yoghurts, cheeses, raibi) remain taxable. Edible fats, margarines and lard are taxable at 20%.
3. Raw sugar
Raw beet sugar, cane sugar and analogous sugars (sucrose) are exempt. Molasses and manufacturing by-products are excluded. Refined sugar falls under the reduced rate of 10% (art. 99-B-1).
4. Packaged dates, raisins, dried figs
Packaged dates produced in Morocco, raisins and dried figs are exempt. Dates, raisins and dried figs sold in bulk fall under the out-of-scope regime (not article 91).
5. Fishery products
Fresh or frozen fishery products, whole or cut, that have not undergone any transformation, are exempt. Fresh status is recognised for fish preserved by refrigeration or simply headed or gutted.
6. Fresh or frozen meat
Fresh or frozen meat is exempt. Since 01/01/2025 (FL 2025, CN 736), seasoned meat (raw, with spice mixture, without prior cooking) is also covered by the exemption (art. 91-I-A-6).
Excluded (taxable at 20%): meat-based products obtained by industrial means (cordon bleu, cheese meatballs), dried, smoked or canned meat.
7. Artisanal olive oil
Olive oil and by-products of olive trituration manufactured by artisanal units are exempt. The use of electricity is not a determining factor in conferring industrial character.
8. Canned sardines (added by FL 2024)
Since 01/01/2024 (CN 735), canned sardines are exempt WORD (art. 91-I-A-8). Former regime: reduced rate of 7%. The exemption concerns only sardines, excluding other canned fish (tuna, mackerel).
9. Powdered milk (added by FL 2024)
Since 01/01/2024 (CN 735), powdered milk is exempt WORD (art. 91-I-A-9). Former regime: reduced rate of 7%.
10. Household soap (added by FL 2024)
Since 01/01/2024 (CN 735), household soap in bars or cakes is exempt WORD (art. 91-I-A-10). This refers to “Marseille soap” type containing at least 63% fatty and resinic acid. Former regime: reduced rate of 7%.
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Art. 91-I-B and following: Exempt services and transactions
Beyond food products, article 91 exempts many services and transactions.
Small manufacturers and service providers (art. 91-II-3)
Individuals (manufacturers, subcontractors, service providers) whose annual turnover does not exceed 500,000 MAD are exempt WORD. This provision, revised by the FL 2020 (CN 730), covers traditional coffee shops, small restaurants, taxi operators, mechanics, hairdressers, etc.
Exceptions: liberal professions listed in art. 89-I-12 (lawyers, notaries, architects, veterinarians) remain liable regardless of their turnover. Persons already liable before 01/01/2020 cannot reverse their liability until after 3 consecutive years of turnover equal to or below 500,000 MAD. The option for voluntary registration remains available (art. 90-2, maintained for a minimum of 3 years).
Medical services (art. 91-V)
Medical acts provided by doctors, dentists, physiotherapists, orthoptists, speech therapists, nurses, herbalists, midwives, clinics, nursing homes and medical analysis laboratories are exempt. The principle of homogeneity applies: no distinction between the medical act and ancillary services (accommodation, catering, operating room rental) within the same hospital.
Anti-cancer drugs and antiviral drugs for hepatitis B and C also remain exempt WORD under article 91. However, since the FL 2024, all other pharmaceutical products are exempt with right to deduction (art. 92).
Press, publications and culture (art. 91-I-D)
The following are exempt: newspapers, publications, books, composition and printing works, printed music, CD-ROMs reproducing publications, documentary or educational films, and cinema box-office receipts. School supplies and products entering their composition are exempt WORD since 01/01/2024 (art. 91-I-E-4, CN 735), with specific formalities for manufacturers.
Financial and social transactions (art. 91-IV)
- Real estate credit and construction transactions for social housing
- Transactions of cooperatives and associations recognised as being of public utility
- Microcredit (associations under law no. 18-97)
- Discounting and rediscounting of government securities, loans to the State
- Interest on student loans by credit institutions
- Insurance company services (subject to the tax on insurance contracts)
Other notable exemptions
- Ordinary candles and paraffins (except decorative candles)
- Wood, cork, charcoal (in logs or in natural state)
- Artisanal carpets of local production
- Metals and scrap materials (art. 91-I-C-5, extended to non-metallic materials by FL 2026, CN 737)
- Precious metal works manufactured in Morocco
- Tax stamps issued by the State
- Equipment for disabled persons and cochlear implants (since FL 2020)
- Hammams, public showers and traditional ovens
- Primary residence construction (self-supply, covered area less than or equal to 300 m², minimum 4-year allocation)
- Sports companies (exemption extended until 31/12/2030 by FL 2026, art. 247-XXXXIV)
- Royalties and licence fees whose value is included in the VAT import tax base (art. 91-XI, added by FL 2024)
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Amendments introduced by FL 2024-2026
The VAT reform launched by the 2024 Finance Law profoundly reshaped article 91. Here are the main changes.
Products moved from a former reduced rate to WORD exemption
| Product | Former regime (before 2024) | New regime 2026 | Source |
|---|---|---|---|
| School supplies | Reduced rate 7% | Exempt WORD (art. 91-I-E-4) | CN 735 |
| Canned sardines | Reduced rate 7% | Exempt WORD (art. 91-I-A-8) | CN 735 |
| Powdered milk | Reduced rate 7% | Exempt WORD (art. 91-I-A-9) | CN 735 |
| Household soap | Reduced rate 7% | Exempt WORD (art. 91-I-A-10) | CN 735 |
| Animal-origin butter | Reduced rate 14% | Exempt WORD (art. 91-I-A-2) | CN 735 |
Other amendments 2025-2026
| Amendment | Effective date | Source |
|---|---|---|
| Dry yeast excluded from exemption (moved to 20%) | 01/01/2025 | CN 736 |
| Seasoned meat included in exemption | 01/01/2025 | CN 736 |
| Short common wheat pasta added to exemption | 01/01/2026 | CN 737 |
| Non-metallic scrap materials added | 01/01/2026 | CN 737 |
| Sports companies: exemption extended 2026-2030 | 01/01/2026 | CN 737 |
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Practical impact: the blocking effect
The blocking effect is the direct consequence of exemption without right to deduction. The WORD-exempt operator bears the VAT charged by their suppliers, without being able to recover it. This input VAT becomes a cost element integrated into the cost price.
Why this penalises the operator
Take the example of a canned sardine manufacturer:
- They purchase raw materials (metal cans, oil, spices) subject to VAT at 20%.
- They cannot deduct this VAT, which therefore increases their production cost.
- They sell their canned sardines without VAT (article 91 exemption).
- Their selling price must absorb the input VAT, which reduces their margin or increases the final price.
This mechanism explains why some operators prefer to opt for voluntary registration when the law allows (art. 90 of the CGI), particularly when their clients are themselves taxable persons who can recover the VAT charged.
Difference with WRD exemption
Conversely, an operator benefiting from exemption with right to deduction (art. 92) does not charge VAT but fully recovers the VAT borne upstream. They can even obtain a VAT credit refund if their deductible credit exceeds the VAT collected on other transactions.
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Reference texts
- Article 91 of the CGI — General Tax Code 2026
- Circular 717 (Volume 2) — Circular Note on VAT and registration duties
- Circular Note 730 — Commentary on FL 2020 provisions
- Circular Note 735 — Commentary on FL 2024 provisions
- Circular Note 736 — Commentary on FL 2025 provisions
- Circular Note 737 — Commentary on FL 2026 provisions
— 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
What is the difference between exemption without right to deduction and exemption with right to deduction?
In both cases, the operator does not charge VAT. The difference concerns the VAT paid to suppliers: in case of exemption without right to deduction (art. 91), this VAT is not recoverable and constitutes a definitive cost. In case of exemption with right to deduction (art. 92), the input VAT is fully recoverable through offset or refund.
Can a small exempt manufacturer (turnover equal to or below 500,000 MAD) opt for voluntary registration?
Yes. Article 90-2 of the CGI allows manufacturers and service providers exempt under article 91-II-3 to opt for voluntary VAT registration. The application is made by registered letter, takes effect 30 days later, and the option must be maintained for a minimum of 3 years. This option is advantageous when the main client is themselves a taxable person who wishes to deduct the VAT charged.
Are school supplies still taxed at 7%?
No. Since 01/01/2024, school supplies (notebooks, pens, schoolbags, etc.) as well as products and materials used in their manufacture are exempt without right to deduction (art. 91-I-E-4, CN 735). The former 7% rate was abolished as part of the VAT reform 2024-2026.
What about pharmaceutical products?
Since 01/01/2024, pharmaceutical products (medicines) no longer fall under article 91 but under article 92: they are exempt with right to deduction (CN 735). Only anti-cancer drugs and hepatitis B/C antivirals remain covered by article 91.
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