In brief: The taxable event for VAT in Morocco determines the moment when the tax becomes chargeable. The default regime is the cash basis: VAT is only due when the price is actually received. Businesses may however opt for the accrual basis, making VAT chargeable upon invoice issuance. Use our VAT qualification tool to determine the regime applicable to your transaction.
General principle (article 95 of the CGI)
The taxable event for VAT in Morocco is the event that gives rise to the taxpayer’s tax liability towards the Treasury. It determines the moment from which the tax becomes chargeable and must be declared and remitted to the tax administration.
Article 95 of the General Tax Code distinguishes two taxable event regimes:
- The cash basis regime (default);
- The accrual basis regime (optional).
The distinction is fundamental because it determines the timing of the VAT return and payment, with direct consequences on the business’s cash flow.
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Cash basis regime — Default
Principle
The cash basis regime constitutes the default for VAT in Morocco. Under this regime, the taxable event for VAT is constituted by the total or partial collection of the price of goods, works or services.
In other words, VAT only becomes chargeable when the business actually receives payment from its client. As long as the invoice has not been settled, the corresponding VAT is not due to the Treasury.
Methods of collection
The following constitute collection within the meaning of article 95 of the CGI:
- Payments in cash, by cheque, bank transfer or bill of exchange: VAT is chargeable on the date of actual collection;
- Debt set-offs: when two businesses owe each other sums and carry out a set-off, this constitutes collection;
- Payments by assignment of receivables: the assignment of a receivable in favour of the supplier constitutes collection.
Practical consequences
Under the cash basis regime, a business that issues an invoice inclusive of tax only remits the VAT to the administration when it receives the corresponding payment. This regime is particularly advantageous for businesses subject to long payment terms, as it avoids having to advance VAT to the Treasury before actually being paid.
Conversely, the client can only exercise their right to deduction of VAT when they have actually paid the invoice to their supplier.
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Accrual basis regime — Optional
Principle
Article 95 of the CGI offers businesses the option of choosing the accrual basis regime. In this case, the taxable event is constituted by the debiting of the client account, i.e. by the recording of the receivable in the accounts, which in practice coincides with the issuance of the invoice.
How to opt for the accrual basis?
The option for the accrual basis regime must be the subject of a declaration to the tax office on which the business depends. Once exercised, the option applies to all of the business’s transactions and takes effect from the first day of the month following the declaration.
Advantages of the accrual basis regime
The accrual basis regime is mainly advantageous for the business’s clients:
- Early deduction: the client can deduct VAT upon receipt of the invoice, without waiting for actual payment. This improves their cash flow by accelerating the recovery of VAT on their purchases;
- Accounting simplification: the correspondence between the invoicing date and the chargeability date simplifies the tracking of filing obligations.
However, for the supplier, the accrual basis regime means remitting VAT to the Treasury upon invoice issuance, even if the client has not yet paid. This regime can therefore weigh on the supplier’s cash flow in case of late payment.
Bills of exchange
In case of payment by bills of exchange (letters of credit, promissory notes), the accrual basis option triggers the chargeability of VAT on the date of the delivery of the bill to the supplier, and not on the date of its actual collection.
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Supply of goods vs provision of services
Article 95 of the CGI distinguishes the taxable event according to the nature of the transaction:
Supply of goods
For sales of goods, the taxable event is constituted by the delivery of the goods. Delivery means the physical handover of the goods to the buyer or the transfer of ownership if this occurs before physical handover.
In practice, under the cash basis regime (default), it is the payment of the price that triggers the chargeability of VAT, even if delivery has already taken place.
Provision of services
For services, the taxable event is constituted by the performance of the service. However, under the cash basis regime, VAT only becomes chargeable at the time of payment of the price by the client.
This distinction is particularly important for services subject to VAT, where the delays between performance of the service and payment can be significant.
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Public contracts and advance payments
Deposits and advance payments
When a client makes a deposit or advance payment before the delivery of goods or completion of a service, this deposit constitutes a partial collection. VAT is therefore immediately chargeable on the amount of the deposit received, under the cash basis regime.
Public contracts
State contracts, local authorities and public establishments are subject to specific rules. Payments are generally made after service rendered and according to specific payment authorisation and ordering procedures.
Under the cash basis regime, VAT only becomes chargeable at the time of actual payment by the public accountant. Businesses holding public contracts must therefore ensure they declare VAT on the basis of actual collections and not on the basis of accepted work statements.
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Impact on cash flow
The choice between the cash basis regime and the accrual basis regime has a direct impact on the business’s cash flow management:
| Criterion | Cash basis (default) | Accrual basis (optional) |
|---|---|---|
| VAT chargeable | Upon client payment | Upon invoice issuance |
| Supplier advantage | No VAT advance | None (VAT due before payment) |
| Client advantage | None (deduction upon payment) | Deduction upon invoice |
| Suited if | Long payment terms | Clients wishing to deduct quickly |
For businesses subject to significant payment delays (construction, public contracts, large companies), the cash basis regime is generally more favourable. Conversely, businesses whose clients pay quickly may find a commercial advantage in opting for the accrual basis, by allowing their clients to deduct VAT earlier.
Regardless of the regime chosen, the VAT return via SIMPL-TVA must accurately reflect the taxable transactions for the relevant period.
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Reference texts
- Article 95 of the CGI — Taxable event and chargeability of VAT: General Tax Code 2026
- Article 88 of the CGI — VAT territoriality
- Circular Note 717, Volume 2 — Detailed comments on the taxable event
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.
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FAQ
When does VAT become chargeable in Morocco?
Under the default regime (cash basis), VAT becomes chargeable at the moment the business actually receives the price of the sale or service. It is neither the invoicing date nor the delivery date that triggers the obligation to remit VAT, but rather the payment received. If the business has opted for the accrual basis regime, VAT is chargeable upon the recording of the receivable in the accounts (invoice issuance).
What is the difference between the cash basis regime and the accrual basis regime?
The cash basis regime (default) links VAT chargeability to the actual payment of the price. The accrual basis regime (optional) links chargeability to invoice issuance. The former protects the supplier’s cash flow; the latter allows the client to deduct VAT more quickly.
Are advance payments subject to VAT?
Yes. Any deposit or advance received constitutes a partial collection that triggers the chargeability of VAT, proportionally to the amount received. The business must declare the corresponding VAT on the return for the month or quarter during which the deposit was collected.
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