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Weekly highlights

Netflix, Amazon...

VAT on digital services is coming

P ERSONS and entities not resi- red accountants. In their view, the tax
authorities can always have recourse to
ding in Morocco and providing
tax treaties and, in particular, to mea-
remote services will have to
identify themselves to the tax autho- sures on administrative assistance for
rities, declare sales made in Morocco VAT collection, even if this tax is not
and pay the tax due. This change intro- included in such treaties.
duced by the Finance Law 2024 brings It can also rely on the banking sys-
Morocco into line with international tem. Pending implementation of the
standards. Services purchased from new measure, tax authorities have
platforms such as Netflix and Amazon, provided an indicative list of services
as well as from companies producing supplied at a distance subject to VAT.
gaming applications, are affected. These include the supply and hosting
In other words, the VAT territoriality of computer sites, and remote main-
rules set out in Article 88 of the Gene- tenance of programs and equipment.
ral Tax (CGI) Code have been revised. residence. The DGI (General Directo- likely to be complicated, especially Added to this are the supply and upda-
Services supplied remotely and online rate of Taxes) has just published a cir- given the diversity of online services ting of software and applications, and
by a non-resident person who has no cular note on the tax measures of the and service providers. the supply of digital content (music,
establishment in Morocco, to a custo- 2024 Finance Law, which provides a Questions are also being raised, par- films, online games, gambling, images,
mer whose head office, establishment number of details on these changes. ticularly with regard to controls and videos, texts, information, etc.).
or tax domicile is in Morocco, or to a Services are deemed to have been sanctions. «Discussions are progres- Also on the list are subscriptions to
film and TV platforms, video-on-de-
customer who is occasionally resident provided in Morocco, even if the cus- sing at OECD level, and mechanisms
in Morocco, are now subject to VAT. tomer is abroad at the time the online will certainly follow. That said, the mand (VOD) services, databases or
their provision, and the remote supply
This minor change will enable addi- service is provided, or even if the ser- mechanism will be fine-tuned in the of training, consulting, or assistance
tional revenue to be collected by the vice is consumed online by the custo- next finance law. Of course, we can’t
tax authorities, and consumption to be mer abroad. For chartered accountants, leave a legal vacuum when it comes to services.o Khadija MASMOUDI
linked to the customer’s place of tax the implementation of this measure is digital transactions», say some charte-

Investment/VAT exemption

How the new system works

W ILL the economic machine
finally get going again after
the publication of the Cir-
cular on Tax Provisions 2024? In
any case, it is expected to answer
many of the questions that taxpayers
and practitioners are asking. One of
the provisions on the minds of those
concerned concerns the new system
of VAT-exempt purchases of capital
goods, with the right to deduct both
on the local and international mar- Capital goods acquired under a VAT-exempt agree-
kets (see L’Economiste no 6683 of ment with the Government are excluded from the
17/01/2024). new compulsory guarantee scheme
Since January 1, 2024, this incentive came into force. «Since January of the lack of visibility for banks regar- initiated up to December 31, 2023
has been subject to the compulsory this year, many of my clients have not ding the nature of the required gua- and paid for in full or in part in 2024
presentation of sufficient guarantees, posted any sales, pending clarification rantee. The practitioner recommends will continue to be subject to the old
already listed in a summary note pu- of the terms and conditions for VAT- that the administration publish a note VAT regime. The new procedure for
blished by the Directorate General exempt purchases of capital goods. on the operating procedure for bank benefiting from the domestic VAT
of Taxes (DGI) and taken up in grea- What’s more, banks didn’t know what sureties and other types of guarantee. exemption (Article 92-I-6 of the CGI
ter detail by the circular note. These type of bank guarantee was required. Moreover, not all such guarantees can Code), as specified in the DGI circular
include bank guarantees, pledges of For new investors, the banks require be formalized with banks, trustees, or just published, consists for taxpayers
public contracts or business assets, the counterpart in sufficient provi- accounting firms. In some cases, the in submitting a request and provide
bills of exchange, and mortgages. sions. This is not an easy task», says services of a notary are required. evidence of regular bookkeeping, ena-
According to some advisers, the a chartered accountant. As a result, As a reminder, a few days ago the bling the goods he intends to purchase
conditionality of this incentive has some businesses have been unable to Customs administration issued a to be entered in a fixed asset account
blocked transactions for many econo- enter into any commercial transactions press release informing the operators giving rise to depreciation.o
mic operators since the Finance Law since the beginning of the year, due to concerned that capital goods imports Hassan EL ARIF
Friday 16 February 2024