Morocco Enforces Annual Self-Construction Cost Declarations for Homeowners

Individuals with a certificate of occupancy for a dwelling built since January 1, 2019 must file a declaration of the construction cost with the tax authorities before the end of February, says L’Économiste, stressing that this provision introduced by the 2019 Finance Act must be executed each year until the completion of the construction work. A social contribution on self-delivery will then have to be paid.

Individuals who have also obtained a building permit without having started the construction work must also provide the declaration with the mention "None", if they have not incurred any expenses. "The declaration must be accompanied by a detailed statement on the invoice reference or the accounting records when the construction is carried out under a turnkey contract," followed by the identification elements, the tax identification number, the company’s ICE, the designation of the goods, the works and services, the amount of VAT, the payment references and other formalities.

This provision, which does not concern construction sites opened before January 1, 2019 or properties with an area of less than 300 m², was introduced following "the difficulty for the tax administration to recover the VAT on materials used in self-construction". It is in this sense that this measure, which consists of paying a small social contribution according to the covered area, from 300 m² onwards, is introduced.

Penalties are provided for in case of non-compliance with this decision. Among other things, "in case of filing the declaration with a delay of less than 30 days after the last deadline set at the end of February, the taxpayer is liable to a fine of 500 DH". Beyond 30 days, the surcharge rate is 15%, 2% in case of failure to file a return or understatement of the total amount of construction, 10% in case of late payment and 5% if the payment is made before 30 days.