Withholding tax on transactions carried out by persons subject to VAT from 1 July 2024

HIBAPRESS-RABAT

The General Directorate of Taxes reminds persons subject to VAT that transactions carried out from July 1, 2024 must be subject to withholding VAT at source.

Thus, when paying invoices issued from July 1, 2024, the customers concerned must make the said withholding tax, under the following conditions:

1) Withholding tax on transactions carried out by suppliers of capital goods and works subject to VAT

Persons subject to VAT, who obtain supplies from suppliers of capital goods and works, are required to withhold at source the total amount of VAT due for taxable transactions carried out with said suppliers, when the latter do not present them with a certificate issued by the Tax Administration, dated less than six (6) months, justifying their tax regularity under the obligations of declaration and payment of taxes, duties and charges provided for by the CGI.

In the case of construction projects, construction companies that obtain supplies from suppliers, in particular of cement, sand, concrete, iron, plumbing, electricity, air conditioning, etc., must ensure the tax compliance of said suppliers, by asking them to present the tax compliance certificate, since these are acquisition operations carried out within the framework of the completion of the works operations.

Failing this, the said companies are required to carry out the withholding tax in accordance with the provisions of Article 117-IV of the CGI. In this case, they shall issue to their supplier, following their request, a document certifying the withholding tax.

The State, local authorities, public institutions and other legal entities under public law that are required to apply the regulations relating to public contracts are not required to make this withholding tax.

2) Withholding tax on transactions carried out by service providers subject to VAT

Legal entities and individuals, whose income is determined according to the actual net income regime or the simplified net income regime, who pay remuneration for the provision of services to taxable individuals who have presented the certificate justifying their tax compliance with respect to the obligations to declare and pay taxes, duties and charges provided for by the General Tax Code (CGI), are required to withhold tax at source up to 75% of the amount of VAT, for the service provision operations referred to in Article 89-I (5°, 10° and 12°) of the CGI appearing on list B annexed to Decree No. 2-06-574 issued for the application of VAT

In the absence of presentation of the certificate of regularity available online at the Simpl-Attestations online service on the DGI Internet Portal, withholding tax is applied at 100% of the VAT amount.

Furthermore, withholding tax is carried out in all cases, at a rate of 75% of the VAT amount, by the State, local authorities and public establishments and companies and their subsidiaries as well as other public bodies which pay remuneration to taxable persons for the provision of services referred to in Article 89-I (5°, 10° and 12°) of the CGI appearing on list A annexed to Decree No. 2-06-574 cited above.

The amount of withholding tax is paid online using the Simpl- online service.

VAT on the DGI Internet Portal. The turnover declaration must be accompanied by a detailed statement of withholding tax.

To do this, the specifications relating to the withholding of VAT at source and the detailed statement of this withholding can be downloaded from the menu on the right of the Simpl-TVA online service on the DGI Internet portal.

Legal references: Article 117 (IV and V) of the General Tax Code

Regulatory references: Article 24 and annex of decree no. 2-06-574 taken for the application of VAT

For any request for information or assistance,

Please contact the DGI Assistance Center at SIMPL@tax.gov.ma

or by calling 05 37 27 37 27 (group lines).

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