VAT Morocco 2026: Rate Convergence, Reverse Charge & Withholding Tax

Introduction: The Completion of Rate Convergence in 2026

The central objective of the reform is to limit rates to two standard rates: 10% and 20% by 2026. Several products and services reach their target rate on January 1, 2026.

10% Rate — New products aligned in 2026

20% Rate — New products aligned in 2026

> ⚠️ Note: Renewable energies retain their favorable regime and are not subject to the 20% rate.

Morocco VAT Rates Summary Table 2026

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II. The VAT Reverse Charge Mechanism

Established under Article 125 quinquies of the General Tax Code (CGI), this optional regime aims to restore tax neutrality for VAT-registered businesses purchasing from non-taxable suppliers.

How does reverse charge work?

The principle: Instead of the supplier collecting VAT, the VAT-registered customer declares and pays the VAT themselves on purchases from suppliers:

• outside the scope of VAT
• or exempt without right to deduction

Calculation and deduction mechanism

Step 1 → Purchase excl. VAT from the non-taxable supplier Step 2 → Customer calculates the theoretical VAT (excl. VAT amount × applicable rate) Step 3 → Customer includes this amount in THEIR OWN VAT return Step 4 → Simultaneous deduction → Zero cash impact if full right to deduction

> ✅ Benefit: Reverse charge enables immediate deduction and restores equality between taxable persons based on their supply source.

Exclusions from the regime

This regime does not apply to:

• Purchases of land
• Purchases of agricultural products (specific regime)

Special case: Non-residents

If a non-resident service provider does not appoint a fiscal representative in Morocco, the Moroccan customer becomes legally liable for the VAT through reverse charge.

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III. The New VAT Withholding Tax (WHT) Regime

To combat fictitious invoices and the informal economy, Finance Law 2024 introduced a withholding tax mechanism on the VAT amount owed by certain suppliers.

A. Equipment Goods and Works Suppliers

WHT rate: 100% of VAT

> ⚠️ This rule applies to VAT-registered customers excluding the State and local authorities subject to public procurement.

B. Service Providers

WHT rate: 75% of the VAT amount (standard regime)

Services listed by decree (installation, transport, brokerage, etc.) are subject to withholding depending on the contracting party:

C. Refund of VAT credit from WHT

The tax credit generated by the withholding tax is eligible for refund.

Documentary obligations: Companies must attach to their VAT return a detailed statement of withholdings applied, including for each transaction:

• The relevant supplier
• The excl. VAT amount of the transaction
• The VAT amount withheld

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IV. Digital Services Provided by Non-Residents

Since 2024, digital services provided remotely by non-residents to Moroccan clients are taxable in Morocco.

Services concerned

• Video and music streaming (Netflix, Spotify, YouTube Premium...)
• SaaS software
• Cloud hosting and web services
• Downloadable digital content

2025–2026 Simplification: Quarterly Filing

How is the client's fiscal domicile determined?

The client is deemed domiciled in Morocco if:

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V. Penalties and Solidarity Measures

The reform is accompanied by a significant tightening of controls and penalties.

Tax solidarity

Any financial or administrative manager, as well as any beneficial owner, may be held jointly and severally liable for unpaid VAT.

Penalty for late deduction

Mandatory retention of investment assets

The obligation to retain movable investment assets for 60 months (5 years) has been reinstated.

> ⚠️ In case of disposal or withdrawal before this deadline, VAT regularization on the initially deducted amount, pro-rated by the remaining months.

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VAT Morocco 2026 FAQ: Everything About the Reform's Completion

❓ 1. What is the main objective of the VAT reform completing in 2026?

The fundamental objective is to establish the economic neutrality of VAT. This involves:

• Reducing the number of rates to converge toward two standard rates: 10% and 20% by 2026
• Reducing the "tax credit trap" (structural tax credit) for businesses
• Broadening the tax base while maintaining exemptions for essential goods

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❓ 2. Which products move to the 10% rate on January 1, 2026?

Several categories reach their 10% target rate (with right to deduction) after three years of transition:

• Refined or lump sugar: 9% in 2025 → 10% in 2026
• Urban transport: Buses, taxis, trams → 10%
• Road passenger and freight transport of passengers and goods → 10%

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❓ 3. What are the changes toward the 20% rate in 2026?

The standard rate of 20% becomes the rule for:

• Electrical energy (excluding renewable energies) → 20%
• Electricity meter rental → 20%
• Domestic air and maritime transport of passengers and goods → 20%

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❓ 4. How does the VAT reverse charge mechanism work in 2026?

Established under Article 125 quinquies of the General Tax Code (CGI), this regime allows a VAT-registered customer to declare and pay VAT themselves on purchases from suppliers outside the scope or exempt without right to deduction:

• Calculation: The customer calculates the tax on the excl. VAT amount, pays it to the Treasury and simultaneously deducts it
• Exclusions: Does not apply to purchases of land or agricultural products

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❓ 5. What is the tax regime for digital services provided by non-residents?

Since 2024, Morocco enshrines the principle of taxation in the consumer's country of residence for dematerialized services (streaming, software, online games):

• Obligation: Foreign providers must register on a dedicated platform and obtain a tax identifier
• Frequency: Declaration and payment on a quarterly basis since 2025

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❓ 6. What are the obligations for retaining investment assets?

To benefit from the right to deduction, companies must retain movable investment assets in an asset account for 60 months (5 years):

> In case of disposal or withdrawal before this deadline, the company must repay a portion of the initial VAT, reduced by one sixtieth per elapsed month.

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❓ 7. Who is jointly and severally liable for VAT payment in 2026?

The law has established extended joint and several liability: any financial or administrative manager, as well as any beneficial owner, may be held jointly and severally liable for unpaid tax, penalties and surcharges in the event of a breach.

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Expert Advice from Accounting Services SARL

The 2026 VAT reform directly impacts your cash flow and supplier relationships. Our experts support you in:

• Audit of your purchasing flows to identify operations subject to WHT or reverse charge
• Setting up a tax certificate collection process for suppliers
• Configuring your accounting software for new reporting rules
• Training your accounting and procurement teams
• Assistance in case of a VAT tax audit

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