VAT exemptions in Morocco in 2026: when should you not charge VAT?
In Morocco, there is no general turnover-based VAT franchise: a company charges VAT from the very first dirham, apart from the transactions exempted by the General Tax Code (Code Général des Impôts, CGI 2026), with two exceptions: retailers with turnover below 2,000,000 MAD and small manufacturers and small service providers below 500,000 MAD. Exemptions without right of deduction (Article 91) prevent the recovery of deductible VAT on purchases, while exemptions with right of deduction (Article 92), such as exports, allow it to be retained and, where applicable, refunded.
The essentials in 5 points
In shortLegal framework: Articles 91 and 92 of the CGI 2026; liability thresholds in Articles 89-I-2° (retailers, 2,000,000 MAD) and 91-II-1° (small manufacturers and service providers, 500,000 MAD)
Article 92: exemptions with right of deduction: exports of goods and services, international transport, capital goods acquired in the first 36 months, industrial acceleration zones
Article 91: exemptions without right of deduction: basic necessities, medical services, certain financial, social and cultural transactions, small manufacturers and small service providers
Standard regime: liability to VAT (2026 rates of 20%, 10% and 7%) with deduction of VAT on purchases (Article 101 of the CGI)
Auto-entrepreneur (Law 114-13): separate simplified tax regime, not subject to VAT
the information provided in this article is for information purposes only and does not constitute personalized legal advice. We recommend that you consult a qualified chartered accountant (expert-comptable) before making any decision. Charikaty provides experts to support you: contact us for free advice.
In everyday language, the term "VAT franchise" (franchise de TVA) is used in Morocco to refer to VAT-exempt transactions. The distinction between the two categories is decisive in economic terms: depending on the category, the business recovers the VAT paid to its suppliers or bears it definitively.
What is the difference between an exemption with and without right of deduction?
A reminder of the three flows
VAT (TVA), governed by Articles 87 to 125 of the CGI, works through three flows:
- Output VAT (TVA collectée): charged to customers on sales
- Deductible VAT (TVA déductible): borne on purchases and investments (Article 101 of the CGI)
- VAT payable (TVA due): the difference between output VAT and deductible VAT
When a transaction is exempt, output VAT is zero. The key question then becomes the following: does the exemption allow the deductible VAT to be retained? The answer depends on the category of exemption.
Article 92 vs Article 91 distinction
| Criterion | Article 92: with right of deduction | Article 91: without right of deduction |
|---|---|---|
| Output VAT | 0 (no VAT charged) | 0 (no VAT charged) |
| Deductible VAT on purchases | Retained | Lost (becomes a cost) |
| VAT credit possible | Yes, refund possible (Article 103) | No |
| Examples | Exports, international transport, capital goods | Basic necessities, healthcare, small manufacturers |
This distinction is essential: transactions falling under Article 92 are tax-favourable, while those under Article 91 give rise to residual VAT (rémanence de TVA: the VAT borne on purchases becomes a non-recoverable expense).
Which transactions are exempt with right of deduction (Article 92)?
Main transactions concerned
Article 92 of the CGI lists the transactions exempt with the right of deduction maintained, in particular:
- Exports of goods and services intended to be exploited or used abroad
- Goods placed under a customs suspension regime
- International transport and related services, including the provisioning and repair of ships and aircraft
- Capital goods recorded as fixed assets, acquired during the first 36 months following the start of business (subject to conditions and formalities)
- Fertilizers, certain agricultural and fishing equipment, certain medicines and social housing
- Goods and services acquired by businesses located in an industrial acceleration zone (Law 19-94)
Exporters may also purchase under VAT suspension the goods and services needed for their export operations, up to the limit of the previous year's export turnover (Article 94).
Economic mechanics
For a services exporter, the mechanism is very favourable:
| Item | Amount |
|---|---|
| Invoice to a foreign customer | 100,000 MAD excl. VAT, exempt from VAT (Article 92) |
| Output VAT | 0 MAD |
| Local purchases subject to 20% VAT | 30,000 MAD excl. VAT + 6,000 MAD of VAT |
| Deductible VAT | 6,000 MAD |
| VAT balance | Credit of 6,000 MAD (refund possible: Article 103) |
The exporter can request a refund of this credit under the conditions of Article 103 of the CGI, according to the procedure presented in our guide on VAT credit and its refund. This is one of the main tax advantages for export-oriented businesses.
Supporting documents
For exports, the business keeps the supporting documents: sales invoices stating the foreign customer and the reference of the exemption, customs declarations for goods, proof of repatriation of foreign currency (bank certificates) for services. The documents are kept for 10 years (Article 211 of the CGI). The full tax and foreign exchange regime for providers working with foreign clients is presented in our guide on exporting services from Morocco.
Which transactions are exempt without right of deduction (Article 91)?
Main transactions concerned
Article 91 of the CGI lists the exemptions without the right of deduction maintained, which include in particular:
- Basic necessities (bread, flour, milk, raw sugar, dates, fresh meat, fishery products) as well as newspapers, books and publications
- Medical and paramedical services (doctors, dentists, physiotherapists, nurses) and the services of clinics and testing laboratories
- Certain private education services provided to pupils and students
- Certain financial transactions (discount and interest on securities issued by the State, student loans, micro-credit); ordinary banking transactions, for their part, remain taxed at 10%
- Transactions carried out by certain cooperatives and non-profit associations, under the conditions laid down in the CGI
- Sales and services of small manufacturers and small service providers whose activity is mainly manual and whose annual turnover does not exceed 500,000 MAD (Article 91-II-1°), as well as taxi operators
Economic mechanics
For a professional falling under Article 91:
| Item | Amount |
|---|---|
| Receipts (consultations, exempt services) | 100,000 MAD, exempt from VAT (Article 91) |
| Output VAT | 0 MAD |
| Purchases subject to 20% VAT | 20,000 MAD excl. VAT + 4,000 MAD of VAT |
| Deductible VAT | 0 MAD (lost) |
| Cost borne | 4,000 MAD of VAT constitutes a definitive expense |
This residual VAT is the major drawback of Article 91 exemptions: the VAT paid to suppliers is not recoverable and increases operating costs. This is why the CGI makes it possible, in the cases provided for in Article 90, to opt for liability to VAT (for example for a small manufacturer that works mainly with VAT-registered customers).
When must you charge VAT?
Liability and deduction
Apart from exemptions, every taxable transaction bears VAT at the rates provided for in Articles 98 and 99 of the CGI: 20% (standard rate, including electrical energy since 2026), 10% and 7%. The 2024 Finance Law (Law No. 55-23) brought the rates into line over three years; in 2026, the 14% rate has disappeared.
Liability does not depend on any threshold for service companies, manufacturers, importers and wholesalers. Retailers (resale in the same condition) are only liable when their turnover for the previous year reaches 2,000,000 MAD (Article 89-I-2°). The taxable person collects VAT from its customers and deducts the VAT borne on its purchases (Article 101 of the CGI). The balance is paid to the State, or constitutes a credit carried forward to subsequent returns.
Monthly or quarterly regime
The taxable person files VAT returns monthly if its taxable turnover for the previous year reaches 1,000,000 MAD, and quarterly otherwise and during its first calendar year (Article 108 of the CGI), by online filing on SIMPL-TVA. The regimes, rates by activity and filing calendar are detailed in our guide on VAT registration and returns in Morocco.
Does an auto-entrepreneur have to charge VAT?
The auto-entrepreneur, governed by Law No. 114-13, falls under a simplified tax regime separate from the standard regime:
- They are not subject to VAT under this regime
- They pay a final income tax (IR libératoire) of 0.5% (trade, industry, crafts) or 1% (services) on the turnover collected
- They do not charge VAT to their customers and do not deduct the VAT on their purchases
- They must comply with turnover ceilings of 500,000 MAD (trade, industry, crafts) and 200,000 MAD (services)
Auto-entrepreneur status is not a "VAT franchise" in the technical sense: it is a complete, separate tax regime, which covers income tax and excludes liability to VAT. Beyond the ceilings, switching to a company (with Charikaty, online) comes with liability to VAT; the limits of this status are presented in our guide on e-commerce without a company and the auto-entrepreneur status.
How do you deduct VAT for a mixed activity (pro rata)?
When a business carries out both transactions giving rise to a right of deduction and transactions that do not, Article 104 of the CGI provides for a deduction pro rata (prorata de déduction) mechanism:
- Deductible VAT on shared purchases is only allowed in proportion to the ratio between turnover giving rise to a right of deduction (taxable transactions and Article 92 exemptions) and total turnover
- This pro rata is calculated on the transactions of the previous year, applied provisionally and then adjusted at the end of the year
This mechanism is important for businesses with mixed activities (for example an establishment combining Article 91 exempt services and taxable ancillary activities).
Is it better to be exempt from or liable to VAT?
When is the exemption favourable?
The Article 92 exemption (with right of deduction) is always favourable: no VAT charged + deduction of input VAT = price competitiveness + recoverable credit.
The Article 91 exemption (without right of deduction) is mixed: a commercial advantage (prices without VAT) but an economic drawback (residual VAT on purchases). The overall outcome depends on the intensity of taxed purchases.
When is liability to VAT still preferable?
For B2B businesses:
- VAT-registered customers recover the VAT charged: they are indifferent as to whether or not the supplier charges VAT
- Large investments subject to VAT (machinery, equipment) argue in favour of liability, which makes it possible to recover the VAT borne
- The image of a structured and compliant business can carry weight in certain contractual relationships
For B2C businesses with modest purchases, the exemption (where provided for by the CGI) improves price competitiveness.
Which obligations remain in the event of an exemption?
Whether the business is liable or exempt, it retains obligations:
- Keeping registers: sales journal, purchases journal (Law 9-88)
- Particulars on invoices: the exempt invoice bears the mandatory particulars of Article 145 of the CGI (IF, ICE, professional tax (taxe professionnelle) number) and the legal reference of the exemption (Article 91 or 92 of the CGI)
- Returns: even where there is no output VAT, the liable business files its returns on time
- Retention of documents for 10 years (Article 211 of the CGI)
Failure to comply with these obligations exposes the business to surcharges for late filing (Article 184 of the CGI: 5% within 30 days, 15% beyond, 20% in the event of an ex officio assessment) and to penalties and late payment surcharges (Article 208 of the CGI: penalty of 10%, reduced to 5% within 30 days, then 5% for the first month and 0.5% for each additional month).
What are the risks of wrongly applying an exemption?
The wrongful application of an exemption results in:
- The back-assessment of the VAT not invoiced, which the business bears if it can no longer re-invoice it to its customers
- Surcharges under Article 184 of the CGI
- Penalties and late payment surcharges under Article 208 of the CGI
- Additional penalties in the event of fraud or delaying tactics
It is therefore essential to check precisely that the transaction does fall under an exemption provided for by the CGI before applying it. Other breaches are listed in our guide on penalties for non-compliance by businesses in Morocco.
How does Charikaty simplify VAT management?
To apply a VAT exemption correctly, here is what you need: a company declared to the DGI (declaration of existence, IF, ICE, professional tax number), the right VAT regime and compliant invoicing (Article 145 of the CGI) bearing the reference of the exemption. With Charikaty, you do everything online. Charikaty is a private Moroccan legal-tech company for 100% online company formation: we set up your company remotely and put in place these first tax obligations. More than 250 companies have already been set up with Charikaty. For the analysis of the applicable exemption regime, the follow-up of your returns on SIMPL-TVA and your VAT credit refund applications (Article 103 of the CGI), our accounting service refers you to partner chartered accountants.
FAQ: VAT exemptions
Is there a "VAT franchise" in Morocco, as in France?
Morocco has no general turnover-based VAT franchise: a company charges VAT from the very first dirham. Two thresholds do exist, however: retailers are only liable from 2,000,000 MAD of turnover (Article 89-I-2°) and small manufacturers and small service providers are exempt up to 500,000 MAD (Article 91-II-1°).
What is the key difference between Article 91 and Article 92?
Article 92 of the CGI maintains the right to deduct VAT on purchases (favourable, for example, for exports). Article 91 removes this right: VAT on purchases becomes a definitive cost (for example, for medical services), unless liability to VAT is opted for where Article 90 allows it.
Do I have to mention the exemption on my invoice?
Yes, an exempt invoice must bear the legal reference of the exemption (Article 91 or 92 of the CGI) as well as the mandatory particulars of Article 145 of the CGI.
If I export services, am I exempt from VAT?
Yes, services exploited or used abroad fall under Article 92 of the CGI (exemption with right of deduction). The exporter invoices without VAT and retains the right to deduct input VAT, which can generate a refundable credit (Article 103), provided that it can prove the repatriation of the foreign currency.
Can an auto-entrepreneur charge VAT?
No, the auto-entrepreneur (Law 114-13) is not subject to VAT: they do not charge VAT to their customers and do not deduct the VAT on their purchases.
What should I do if I have both taxable and exempt transactions?
A business with mixed activities applies the deduction pro rata under Article 104 of the CGI: deductible VAT on shared purchases is allowed in proportion to the ratio between turnover giving rise to a right of deduction and total turnover.
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