Our online VAT calculator allows you to calculate quite easily the amount of Moroccan Value-Added Tax and the amounts excluding and including tax.
How to use our VAT calculator: Enter the amount excluding Value-Added Tax and then select the applicable rate (20%, 14%, 10% or 7%).
The default rate applied to our calculator is the standard rate of 20%. You can select another rate if necessary (14%, 10% or 7%).
The formula for calculating Value-Added Tax from the price tax included is as follows: to calculate Value-Added Tax from the amount including tax, you must divide the amount including Value-Added Tax by 1 + percentage of Value-Added Tax (i.e. if it is 20%, then you must divide by 1.20), then multiply by Tax rate (multiply by 0.2 for a tax rate of 20%) and round to the nearest value.
- The standard rate of 20%: (price incl. tax / 120) x 20
- Reduced rate of 14%: (price incl. tax / 114) x 14
- Reduced rate of 10%: (price incl. tax / 110) x 10
- Reduced rate of 7%: (price incl. tax / 107) x 7
It's quite simple. Multiply the net amount by 1 + tax rate (i.e. multiply by 1.20 if the rate is 20%) and you will get the amount including tax or multiply by the applicable rate to get the amount of tax:
- The Standard rate of 20%: price excluding VAT x 20/100
- Reduced rate of 14%: price excluding VAT x 14/100
- Reduced rate of 10%: price excluding VAT x 10/100
- Reduced rate of 7%: price excluding VAT x 7/100
First of all, what is VAT and what are the commercial transactions involved?
Introduced in Morocco in 1986, the value-added tax is a sales tax. This tax is, therefore, an indirect tax linked to consumption and collected by the Moroccan State.
The VAT applies to all economic operations and transactions, whether industrial, artisanal, real estate or commercial.
In any event, the value-added tax shall in no way represent a tax burden on the company or undertaking in question to the extent that the final consumer pays it. Its primary role is to act as an intermediary between the ultimate consumer and the Moroccan State.
Currently, three types of VAT rates exist in Morocco and apply according to the operations carried out.
The standard rate of 20% is the most common in our daily business transactions. This rate applies to all taxable operations for which no other rate is provided.
Besides, there are three other reduced rates: a rate of 14%, a rate of 10% and a rate of 7%.
A rate of 14%:
- with the right to deduct, the intermediary percentage of 14% concerns all current consumer products and services, i.e., non-industrial butter, passenger transport, or goods transport.
- Without any deduction, the 14% rate mainly concerns all services provided by insurance agents.
A rate of 10%:
With the right to deduct, the 10% rate relates to certain food products, beverages, hotels, tourism, tourist establishments, and financial transactions;
A percentage of 7%:
With the right to deduct, the 7% rate includes sales and deliveries of certain essential products: such as milk powder, pharmaceutical products, water delivered to the various public distribution networks, etc.
What about the specific rates?
The specific rates, for their part, concern all alcoholic beverages including wine: either an amount of 100 MAD per hectolitre, articles made partly in gold, platinum or even silver: or an amount of 5 MAD per gram of gold or platinum and finally an amount of 0.10 MAD per gram of silver.
What about the exemption from Value-Added Tax in Morocco on imports and domestically?
All capital goods, materials, tools (spare parts, imported accessories, ...) used for the implementation of investment projects whose total amount is equal to or greater than MAD 100 million are exempt from Value-Added Tax under an agreement previously concluded with the Moroccan State. It should be noted that these investment projects must be acquired by the parties concerned over a period not exceeding 36 months from the date on which the activity begins.
You have probably heard about output tax and deductible (or recoverable) Value-Added Tax. However, in practice, what is the difference between these two items?
The recoverable VAT is simply the amount that taxpayers deduct from their purchases to offset it with the tax they would have previously charged (by including it in their selling price). Consequently, taxpayers use deductible VAT to calculate the amount they will have to pay to the Moroccan State.
The mathematical formula is simple, and as follows:
The deductible tax is equal to the purchase price excluding tax multiplied by the current rate
As for the tax to be paid to the Moroccan State, it represents the subtraction of invoiced (or collected) VAT and deductible VAT.
In Morocco, taxpayers files VAT returns on a monthly or quarterly basis.
The monthly return applies to all taxpayers whose revenue reached or exceeded one million (1,000,000) dirhams during the past year.
Submitting the monthly VAT return implies a filing at the end of each month of a statement of the sales made during the previous month. The taxpayer is liable to VAT payment should the amount of output VAT exceeds that of reclaimed VAT.
A VAT credit arises should deductible Value-Added Tax for the period is higher than the collected Value-Added Tax.
The quarterly VAT return must be submitted by all taxpayers whose turnover is less than one million (1,000,000) dirhams, by taxpayers with a seasonal activity or those who carry out a periodic or occasional business and finally, by all newly registered taxpayers.
The quarterly return is mandatory and requires the filing of a statement of the revenue collected before the end of the month following the quarter concerned.
In practice, it is necessary to be extremely cautious in terms of formalism or compliance with deadlines related to filing and payment of value-added tax. Indeed, repeated mistakes or delays in the returns submission or payment are likely to trigger a tax audit.
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