Transactions excluded from the right to deduct in Morocco
The 2023 General Tax Code Established by article 5 of finance law n° 43-06 for the 2007 budget year, promulgated by Dahir n° 1-06-232 of 10 Hija 1427 (December 31, 2006), as amended and supplemented.
What is a General Tax Code ?
The General Tax Code (CGI) is the legal basis opposable to all. In particular, it brings together the provisions relating to the basis and collection of income tax, corporation tax, value added tax, registration fees, local taxes and other direct taxes. , and indirect, perceived by the State.
Our firmsheds light on the Operations excluded from the right of deduction in Morocco
I.- Does not give rise to the right to deduct, the tax having been charged:
1° -THEgoods, products, materials and services not used for operational purposes;
2° -buildings and premises unrelated to operations;
3° -passenger transport vehicles, excluding those used for the needs of public transport or the collective transport of company personnel or when they are delivered or financed as a donation in the cases provided for in Articles 92 (I - 21° and 23°) and 123 (20° and 21°) of the CGI 2023;
4°-petroleum products not used as fuels, raw materials or process agents, excluding:
- diesel fuel used for the operating needs of collective road transport vehicles for people and goods as well as the road transport of goods carried out by taxable persons on their own account and by their own means;
- diesel fuel used for operating passenger and freight rail vehicles;
- diesel and kerosene used for air transport needs. The terms of application of this provision are set by regulation;
5° -purchases and services of a charitable nature;
6° -mission, reception or representation expenses, excluding those delivered or financed as a donation in the cases provided for in article 92 (I -21° and 23°) of the CGI 2023;
7º -the transactions listed in article 99-3°-b) of the CGI 2023;
8º-(repealed);
9°-purchases of goods and services not justified by invoices in accordance with the provisions of article 146 of the CGI 2023.
Good to know : In order to comply with the legislation in force, it is important to consult the General Tax Code. The chartered accountant is the best ally to advise you on this subject. A chartered accountant is a liberal professional whose activity is regulated by law (15-89). To exercise his activity, a chartered accountant must be registered on the board of the Order of Chartered Accountants.
II.- Is not deductible, the tax having burdened:
purchases, works or services whose amount exceeds five thousand (5,000) dirhams per day and per supplier, within the limit of fifty thousand (50,000) dirhams per month and per supplier and whose payment is not justified by check non-endorsable strikethrough, commercial paper, magnetic means of payment, bank transfer, electronic process or by offsetting with a claim against the same person, provided that this offsetting is carried out on the basis of documents duly dated and signed by the parties concerned and accepting the principle of compensation.
However, the payment terms provided above are not applicable to purchases of live animals and unprocessed agricultural products.
III.- Does not give rise to a right of deduction for credit institutions and similar bodies, the value added tax having been levied:
- acquisitions of residential accommodation intended for rental under the “Ijara Mountahia Bitamlik” contract;
- acquisitions intended to be sold under the “Mourabaha”, “Salam” and “Istisna'a” contracts.
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