How to claim a VAT refund on goods purchased by foreign residents in Morocco
The Moroccan Ministry of Economy and Finance, through the General Directorate of Taxation, has published a useful ‘Tax Guide for Moroccans Residing Abroad’, detailing the various tax benefits that Moroccans living abroad can take advantage of.
Priority for Morocco
Moroccan residents abroad are a priority for the Moroccan government, as they are an important contributor to the country's economy. In 2023, the total amount of remittances sent by Moroccans living abroad amounted to $11.8 billion, making the country the second largest recipient of remittances in the Middle East and North Africa (MENA) region, behind only Egypt.
Moreover, these citizens are the leading contributors to foreign investment in securities of the Undertakings for Collective Investment in Transferable Securities, equivalent to 10 per cent of the revenues received by the government in Rabat.
King Mohammed VI, in a speech last year, called for the establishment of mechanisms to accompany, support and benefit from the experiences of the Moroccan community abroad. This royal initiative has resulted in the establishment of an inter-ministerial working group and the creation of the Hassan II Foundation to assist them.
Tax guidance
This line of action includes the tax guide published by the Directorate General of Taxes, which covers the various facilities provided by Moroccan legislation for taxation related to real estate, income and VAT.
With regard to the latter, value added tax, the guide details how both Moroccans living abroad and citizens of other countries who are not resident in Morocco can apply for a refund of the VAT charged on purchases of products during their stay in the country .
This refund, provided for in Article 92-I-39° of the General Tax Code and Article 26 of Decree 2.06.574 of 31 December 2006, applies to purchases of a value equal to or greater than 2,000 dirhams (including VAT) and intended for use abroad, made in Morocco by non-resident individuals making a short stay in the country.
The guide details the products whose purchase is excluded from the VAT refund: food products, both solids and liquids; tobacco; medicines; unset precious stones; weapons; means of transport for private use; and cultural goods.
Conditions
According to the document prepared by the Directorate General of Taxes, the refund of VAT charged to non-residents (both Moroccans and foreigners) is subject to a number of conditions:
- The sale must be made at retail, on the same day and by the same seller, for an amount equal to or greater than 2,000 dirhams (including VAT).
- The goods purchased must be transported in the buyer's luggage within a period not exceeding three months from the date of purchase.
- The seller must be the taxable person, i.e. the natural or legal person liable to pay a tax liability, in this case value added tax.
- In addition, the seller must undertake to complete the formalities of the sale and purchase entitling him to a VAT refund, by completing at the time of sale the form known as the ‘export sales receipt’, which consists of an original and three copies . The seller keeps one copy and gives the original and two copies to the buyer, together with a pre-addressed stamped envelope addressed to the tax authorities.
- This form, which has been drawn up by the tax authorities, must be accompanied by the invoices for the purchase of the goods.
Identification of seller and buyer
As for the invoices, the regulations require that they include the following information:
- Name and surnames, or company name of the seller; address of the seller; their tax identification number; and the date of the sale.
- Name and surname of the buyer, as well as the buyer's nationality, passport number and full address.
- Number of the bank account in his name, opened in Morocco (in this case the RIB or bank identity declaration will be required) or abroad (IBAN), together with the name of the bank.
- Nature, quantity and unit price of the goods sold.
- Total amount of the purchases, specifying the rate of value added tax that has been applied.
- Amount of VAT to be refunded.
- Invoice number, signatures of the buyer and seller, and stamp of the latter's place of business.
Beneficiaries
As for the citizens who can benefit from this refund, they must meet the following requirements and complete these formalities:
- They must be individuals who are not resident in Morocco (they may be foreigners or Moroccans living abroad) and be making a short stay in the country.
- They must present, on leaving Moroccan territory, the products purchased, the original form and the two copies given to them by the seller, together with the invoices. This must be done within three months of purchase, which is the maximum time limit to qualify for a refund.
- Customs will stamp the original form and the two copies, after verifying the information and the goods purchased, and give the original and one copy to the buyer.
Once all these formalities have been completed, the tax administration will proceed to refund, by means of a transfer to the buyer's bank account, the amount corresponding to the value added tax, deducting the amount of the transfer commission.