Why and how should you appoint a fiscal representative in Morocco ?
TAX REPRESENTATION IN MOROCCO
The role of the Tax Representative, a specialised company based in Morocco, is to assist foreign firms to carry out transactions and provide services on Moroccan soil, or on behalf of a Moroccan company, with no physical presence in the country. Tax representation is strictly regulated in Morocco and it is important to make detailed enquiries among specialists to determine whether tax representation is a possible solution in regard to the transaction.
WHY APPOINT A TAX REPRESENTATIVE IN MOROCCO ?
Certain operations involving Morocco have to be handled by a Moroccan tax representative. Below are a few examples of such operations:
Services provided in the supplier’s country but consumed in Morocco:
Any company providing services on behalf of a Moroccan company, even if such services are provided in the country of the service provider, must be registered with the Moroccan authorities.
The service provider’s failure to register makes it impossible for the client to deduct the VAT collected when it is reverse-charged.
Services provided in Morocco by a foreign company:
Any foreign company that provides services in Morocco must appoint a tax representative to handle its registration with the Moroccan authorities.
Services provided for which payment is made by a Moroccan company to a foreign company are subject to a flat-rate withholding tax of 10%.
In the case of companies which provide services in Morocco and which are required to appoint a tax representative, payment of fees and VAT must follow a specific process in compliance with the regulations of the foreign exchange authority to obtain authorisation for currency outflow.
Flat-rate withholding tax:
In accordance with certain regulations, profit made on export turnover is exempt from tax; however, dividends on this profit paid out to shareholders who do not reside in Morocco are subject to a flat-rate withholding tax of 10%.
NOTIONS À RETENIR
Do you need a tax representative in Morocco ? Do you want to establish a company in Morocco ?
WHAT ARE THE POTENTIAL OPTIONS FOR WORKING IN MOROCCO ?
Morocco is a country that is very open to the world and at the same time very protectionist. It is important, in terms of projects conducted on Moroccan soil or on behalf of a Moroccan company, to be able to define the tax requirements demanding compliance.
There are two possibilities when working with Morocco or in Morocco:
Depending on your activity, tax representation may be possible but there are limited opportunities for deducting and deferring VAT credit. Note: VAT credit is managed by contract and not by entity. Furthermore, the 10% withholding tax is calculated on the basis of total turnover and not on profits. This system should be avoided in dealing with Moroccan suppliers.
Company formation and permanent establishment:
The formation of a company for the purpose of obtaining a permanent establishment in Morocco enables you to:
defer your VAT credit regardless of the contract
pay tax on profits
It is useful to have a permanent establishment by forming a company in Morocco if you are dealing with Moroccan suppliers.
FINANCE BILL 2014: The 2014 Finance Bill stipulates the appointment of a tax representative for foreign companies not in possession of a permanent establishment in Morocco. In the event that no tax representative is appointed or no company is formed in Morocco, the foreign company loses its entitlement to deduct VAT and renders its client liable.
HOW CAN ASD MOROCCO HELP YOU ?
Over the last 15 years, the ASD Group has expanded into every European Union country to assist companies with tax, customs and social procedures.
In view of the significant trade between the European Union and Morocco, there has been increasing demand for our services by our clients in Morocco, leading us to open an agency in Casablanca.
We offer a tax representation and company formation service. To select the best option, your case will be examined by an expert with knowledge of the country.
STUDY OF YOUR OPERATIONS
Recommendation of the option to select for your activity in Morocco
We handle all fiscal procedures in terms of tax representation
FORMATION OF A MOROCCAN COMPANY
Choice of legal form, preparation of articles of association, opening of bank account, etc.
Management of your accounts on the basis of your accounting requirements
RECOVERY OF VAT
Handling of cases to recover VAT paid in Morocco
A dedicated contact person who speaks your language deals with your case from start to finish