VAT is the tax you collect for the State on every sale, and recover on your purchases. Get it wrong and it costs more than one bad line on an invoice: it skews your prices, your margin and what you pay every month or every quarter.
This article sets out what applies in 2026 to a shopkeeper, a wholesaler or a distributor: the rates in force, the calculation in both directions, what the invoice must show, how often to file, and VAT withholding. The rules quoted come from the 2026 General Tax Code (CGI); the dirham amounts are worked examples.
VAT rates in 2026: 20% and 10%
The 2024 finance law launched a reform of the rates, spread over three years. Transactions that were at 7% or 14% were moved to 20%, to 10% or to exemption: some as early as 2024, others in yearly steps, and the last steps took effect on 1 January 2026. Since that date, article 99 of the CGI knows only two rates:
- 20% — the standard rate. It applies by default to anything that has no reduced rate or exemption.
- 10% — the reduced rate. It covers a specific list: among others edible oils (except palm oil), cooking salt, milled rice, some pasta, catering and accommodation, and, since 2026, refined sugar, which was at 7%.
Alongside the rates there are exemptions. Article 91 exempts in particular the sale (other than for consumption on the premises) of bread, milk, raw sugar, fresh or frozen meat and fresh or frozen fish products. Article 92 provides other exemptions, this time with the right to deduct, such as exports. An exempt sale carries no VAT, but the invoice must state that it is exempt.
If your software, your labels or your old invoice templates still offer 7% or 14%, fix them: those rates no longer exist in the code for 2026 transactions.
Who must charge VAT
Not everyone collects VAT. For trade, article 89 of the CGI makes the following mandatorily liable:
- wholesale traders (registered for the business tax as wholesalers), whatever their turnover;
- traders whose taxable turnover for the previous year reaches 2,000,000 DH or more;
- manufacturers, for the products they make or package, and importing traders, for their resale as-is of imported products.
A retailer below that threshold is not required to, but may opt to become liable (article 90), for at least three years. And a trader who became liable through turnover can only leave after three consecutive years below 2,000,000 DH.
Calculating VAT: from excl. tax to incl. tax
The price excluding tax (HT) is your price. VAT is calculated on it, and the price including all taxes (TTC) is the sum of the two.
- VAT = excl. tax × rate
- Incl. tax = excl. tax × (1 + rate) — that is excl. tax × 1.20 at 20%, excl. tax × 1.10 at 10%.
Example: a carton sold at 1,000 DH excl. tax at 20%. VAT = 1,000 × 0.20 = 200 DH. Incl. tax = 1,200 DH. At 10%, the same carton would give 100 DH of VAT and 1,100 DH incl. tax.
Getting back to excl. tax from incl. tax
This is where the most common mistake happens. The customer pays 1,200 DH incl. tax, and you take off 20% to get the excl. tax price: 1,200 − 240 = 960 DH. That is wrong. The 20% is calculated on the excl. tax price, not on the incl. tax price.
- Excl. tax = incl. tax ÷ (1 + rate) — 1,200 ÷ 1.20 = 1,000 DH.
- VAT = incl. tax − excl. tax — 1,200 − 1,000 = 200 DH.
In other words, in a price including 20% VAT, the VAT is 1/6 of the total, not 20%. At 10%, it is 1/11: an item priced 550 DH incl. tax contains 500 DH excl. tax and 50 DH of VAT.
To check an amount without redoing the sum by hand, use our free VAT calculator: it converts both ways, at 20% and 10%.
An invoice with several rates
A food wholesaler often sells, on the same invoice, products at 20%, others at 10% and others exempt. Example:
- Cleaning products: 2,000 DH excl. tax at 20% → 400 DH of VAT.
- Edible oil: 500 DH excl. tax at 10% → 50 DH of VAT.
- Milk: 300 DH, exempt → 0 DH of VAT.
Total excl. tax: 2,800 DH. Total VAT: 450 DH. Total incl. tax: 3,250 DH. You cannot apply a single rate to the total: each line carries its own rate, and VAT is calculated line by line or by rate group.
What the invoice must show
Article 145-III of the CGI requires pre-numbered invoices in a continuous series (or produced by a computer system in a continuous series), showing at least:
- the seller's identity, tax ID and business tax number, as well as their ICE (article 145-VIII);
- the date of the transaction;
- the customer's name or company name and address, with their common business identifier (ICE);
- the price, quantity and nature of the goods;
- the VAT amount, shown separately, whether added to the price or included in it — or, for an exempt sale, a statement of the exemption;
- the payment references and method.
The text does not explicitly require a summary by rate, but as soon as an invoice mixes 20%, 10% and exempt, a « base excl. tax / rate / VAT » table per rate is what lets your customer, and an inspector, check the total without redoing every line. For sales to private individuals, the till receipt can stand in for an invoice if it shows the date, the seller, the description, the quantity, the price and, where applicable, the VAT.
If you still invoice in Word or Excel, start from a free invoice template that already has the excl. tax, VAT and incl. tax columns.
Output VAT, input VAT: what you pay
You do not pay over all the VAT on your sales. You pay the VAT collected on your sales, minus the VAT you paid on your purchases (deductible VAT). Example: over a month, 150,000 DH of sales excl. tax at 20% give 30,000 DH of output VAT; 110,000 DH of purchases excl. tax at 20% give 22,000 DH of deductible VAT. You pay 8,000 DH.
Two points. VAT on a purchase is deducted for the month in which the invoice is paid (article 101), and that right must be used within the year. And it cannot be deducted without a compliant invoice, nor for a purchase over 5,000 DH per day per supplier paid in cash (article 106). That is why a lost supplier invoice costs money. It is also why a selling price wrongly converted from incl. to excl. tax skews not only the VAT, but the gross margin you think you are making.
Monthly or quarterly return
- Monthly — mandatory if taxable turnover for the past year reaches or exceeds 1,000,000 DH (article 108).
- Quarterly — below 1,000,000 DH, for seasonal or occasional activities, and for newly liable businesses during their first calendar year. You can request the monthly regime before 31 January.
The return is filed, with payment, before the 20th of the following month (or of the first month of the following quarter). When filing online, the deadline runs to the end of that month (articles 110 and 111).
VAT withholding at source
Since 1 July 2024, part of the VAT is no longer paid by whoever invoices it, but withheld by their customer, who pays it straight to the tax authority (article 117 of the CGI, from the 2024 finance law). Two cases concern businesses.
Services (article 117-V) whose list is set by regulation (the VAT implementing decree). The State, local authorities and public bodies and companies withhold 75% of the VAT of liable service providers. Liable private-law legal entities, and liable individuals under the real or simplified regime, withhold 75% when they pay an individual provider who gave them a tax compliance certificate, and 100% otherwise. The 2026 finance law extends withholding (75% with a certificate, 100% without) to services provided by companies: to banks and insurers from 1 July 2026, and to other businesses according to their turnover excluding VAT — 500 million DH and over from 1 July 2026, 350 million from 1 January 2027, 200 million from 1 January 2028.
Example: a 10,000 DH excl. tax service, so 2,000 DH of VAT. With a certificate, the customer withholds 1,500 DH (75%), pays it to the tax authority, and pays the provider 10,500 DH. The provider itself only pays over the remaining 500 DH, before its own deductions.
Capital goods and works (article 117-IV). If the supplier does not give its liable customer a tax compliance certificate less than six months old, the customer withholds the VAT. The State, local authorities and public bodies subject to public procurement rules do not have to withhold.
Excluded in particular are services of 5,000 DH or less, up to 50,000 DH per month per provider, as well as water and electricity delivered to public networks, sanitation, telecoms and insurance brokers. The withholding is paid to the tax authority in the month after each payment.
For a trader reselling everyday goods, withholding therefore does not apply to ordinary sales. It concerns them as a customer, when they pay for services, and as a supplier if they deliver capital goods without an up-to-date certificate.
Do the calculation once, correctly
For a few invoices a month, a calculator is enough. For dozens of delivery notes and invoices with several rates, the software should do the maths. With Gestio invoicing, you enter prices excl. or incl. tax and the software calculates in the right direction; each invoice shows the excl. tax, VAT and incl. tax breakdown and the amount in words, and exports to Excel, CSV or PDF for your accountant.
Frequently asked questions
Does the 14% rate still exist in 2026? No. Transactions at 14% moved to 20% or 10% depending on the case (for example, road transport of passengers and goods has been at 10% since 1 January 2026). The 7% rate is gone too: its transactions moved to 10%, 20% or exemption.
How do I calculate VAT from an incl. tax price? Divide the incl. tax price by 1.20 (or 1.10) to get the excl. tax price, then subtract: incl. tax − excl. tax. Never take 20% off the incl. tax price.
Does a small retailer have to charge VAT? Not if they are under 2,000,000 DH of turnover, are neither a manufacturer nor an importer, and have not opted in. A wholesaler, on the other hand, is liable whatever their turnover.
Does withholding apply to the sale of goods? Not to ordinary sales. It covers certain services, and capital goods and works delivered without a tax compliance certificate.
For a specific case (option, exemption, refund), the reference remains the CGI in force and your local tax office or your accountant.