Morocco Expands VAT to E-Commerce, Raises Sugar Tax in 2024 Tax Overhaul

It is notably planned to expand the scope of value-added tax (VAT) to the e-commerce sector. In detail, according to Al3omk, two main measures have been taken: the modification of the local VAT rules provided for in Article 88 of the Tax Code and the obligation to identify service providers on the electronic platform, with the presentation of reports on income and the payment of VAT due in Morocco.

According to the 2024 Finance Act, the VAT applied to refined sugar will gradually increase from 8% to 9% in 2025 and 10% from January 1, 2026. A gradual increase in VAT on electricity will also be observed, reaching 20% in 2026, 16% in 2027 and 18% the following year, it is pointed out, nevertheless stressing that these variations in VAT rates will not affect the selling prices of electricity.

Similarly, the VAT rate applied to water for non-domestic use has been revised. As of January 1, 2024, a 10% VAT with the right to deduction on sales and deliveries is planned, announced the General Directorate of Taxes, also mentioning a gradual increase in the VAT rate on passenger and freight transport operations, with the exception of land transport, reaching 20% in 2026. On the other hand, the VAT rate on urban transport operations will see a gradual decrease to reach 10% in 2026.

The 2024 Finance Act also provides for an increase from 40 to 50% in the fixed exemption rate applied to the total amount of artists’ fees. The measure will come into effect next year. Also, the drafting of real estate contracts by notaries, contract drafters and lawyers accredited with the Court of Cassation in the event of a transfer of real estate ownership is now subject to the presentation of a certificate of payment of taxes and duties due on the property for previous years.