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 written declaration to the local tax office on which the business depends, filed before 1 January of the year for which it applies or, for new taxpayers, within thirty days of the start of activity (Art. 95). The tax regime cannot be changed during the year. A business switching from the cash basis to the accrual basis must attach to its option declaration the list of its debtor customers and pay the corresponding VAT within thirty days of sending that declaration, so that earlier invoices not yet collected do not escape the tax.
Advantages of the accrual basis regime
The accrual basis regime does not change the position of the client: under Article 101-3° of the CGI, the right to deduction arises in the month of partial or full payment of the invoice, whatever the supplier’s regime. The client therefore cannot deduct VAT “upon invoice” on the grounds that its supplier is on the accrual basis; the only tolerance admitted by administrative doctrine concerns a client that is itself under the accrual basis regime, for whom the date of acceptance of a bill of exchange counts as payment.
For the supplier, the advantage of the accrual basis lies in simpler monitoring: VAT is chargeable upon invoicing (recording of the receivable in the customer account), which aligns the VAT return with invoiced turnover and avoids tracking collections. In return, the supplier must remit VAT to the Treasury before being paid, which weighs on its cash flow in case of late payment.
Bills of exchange
In case of payment by bills of exchange (bills of exchange, promissory notes), a supplier under the accrual basis regime remains liable for VAT as soon as the receivable is recorded in the customer account, i.e. upon invoicing, regardless of the delivery or maturity of the bill. For a taxpayer under the accrual basis regime, administrative doctrine also accepts that the date of acceptance of the bill counts as the date of payment for exercising the right to deduction, without waiting for maturity; under the cash basis regime, it is the actual collection of the bill that counts.
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Special cases: set-off, exchange and self-supplies
Article 95 of the CGI does not distinguish the taxable event according to whether the transaction is a sale of goods or a provision of services: in both cases, the tax is chargeable upon collection (default) or upon debit (option). The Code does, however, provide for three situations in which the taxable event occurs at the time of delivery of the goods, completion of the works or performance of the service:
- payment by way of set-off or exchange;
- self-supplies referred to in Article 89 (goods manufactured or built by the taxable person for its own needs);
- where payment is made by set-off against a receivable from the same person, the taxable event occurs on the date of signature of the document recording the parties’ acceptance of the set-off.
These rules apply to sales of goods as well as to services subject to VAT, for which 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. Conversely, sums advanced on behalf of the client fall under the treatment of disbursements, which follows distinct rules with regard to the taxable base.
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) | None (deduction upon payment, Art. 101-3°) |
| Suited if | Long payment terms | Fast-paying clients, simplified monitoring |
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 opt for the accrual basis to simplify the monitoring of their output VAT, with no effect on the date of deduction for their clients. The choice between the two regimes is, moreover, often examined as part of a tax law advisory engagement.
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 simplifies filing but requires VAT to be remitted before collection. In both cases, the client deducts VAT only upon payment of the invoice (Art. 101-3°).
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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