Fiscal representation in Morocco
Why is ASD Group located in Morocco ?
For the last 10 years, ASD Group has been expanding into EC Member States to assist companies with their fiscal, Customs and social formalities.
Due to a close relationship and a large amount of exchanges between Morocco and the European Union ; enquiries from our customers grew hence the reason why we decided to tap into the Moroccan market to satisfy our clients’ requirements.
• Services provided in the supplier’s country but consumed in Morocco :
Any company that carries out service provision on behalf of a Moroccan company, even though the services are provided in the country where the supplier is located, must be registered with Moroccan authorities.
Default in registration generates the incapacity for the client to deduct VAT collected when applying reverse charge.
• Services provided in Morocco by a foreign company :
For any service provision carries out by a foreign company, it is compulsory for the foreign entity to appoint a fiscal representative to handle registration with local authorities.
Services provisions paid by a Moroccan company to a foreign company are subject to a flat rate tax of 10%.
• Exchange rate check :
For companies that provide services on Moroccan soil and with an obligation to appoint a fiscal representative, payment of fees and VAT must follow a specific process in order to comply with laws therefore obtaining the authorisation to outflow currency.
• Flat Rate Tax :
According to certain rules, profits realised on an export turnover should be tax exempted. However, shares on the export turnover benefiting to foreign shareholders are subject to a flat tax rate of 10%.
How to do business in Morocco ?
Which scheme to choose from ? 2 options available.
• Fiscal representation :
Depending on your activity, you might be entitled to use a fiscal representation to expand your business in Morocco. However, deducting VAT and/or deferringVAT credits are limited.
Caution : VAT credit has to be managed for each contract (it cannot be managed for a whole company all at once).
The 10% witholding tax is calculated on the total turnover rather than on profits. A company should avoid using this scheme when dealing with Moroccan suppliers.
• Company formation, incorporation of a permanent establishment :
Incorporating a company to have a permanent establishment in Morocco allows your company to :
- Defer a VAT credit ;
- Pay income tax.
Having a permanent establishment is a solution to encourage when dealing with Moroccan suppliers.
Financial Law 2014 : The 2014 Financial Law makes it compulstory for foreign entities without permanent establishment in Morocco to appoint a fiscal representative to carry out transactions in the country. Without a fiscal representative, the foreign company loses the right to deduct VAT and makes it liable on the client’s behalf.
Services provided by ASD in Morocco
- Fiscal Representation.
- Company formation in Morocco.
- Business Registered Address service.
- Logistics and Customs.
- Set up and monitoring of back office.
- Agent ensuring link between supplier and client.
To learn more about fiscal representation and all the services we provide in Morocco, please feel free to contact ASD Group.