VAT Withholding (RAS TVA) in Morocco: the 5,000 DH exemption threshold and the 50,000 monthly cap

A question comes up again and again since VAT withholding at source (RAS TVA) took effect in Morocco: "Aren't invoices below 50,000 DH exempt?" The answer is no – and the confusion comes from misreading the threshold.

The rule actually works on two levels: a per-operation threshold of 5,000 MAD incl. VAT, combined with a monthly cumulative cap of 50,000 MAD per supplier. This article breaks down both, the other exclusions (public procurement, excluded sectors), and gives worked examples drawn from Article 117 of the 2026 General Tax Code (CGI).

For the general mechanism of the withholding (75% / 100% of VAT, the turnover threshold), see our guide to withholding on services.

The "50,000" trap

Many businesses believe any invoice under 50,000 DH escapes the withholding. That's incorrect. The text of CGI Article 117-V states precisely:

"...service operations whose amount is less than or equal to five thousand (5,000) dirhams, within the limit of fifty thousand (50,000) dirhams per month and per supplier of these services."

The two figures must be read together:

In other words, the 50,000 is not a per-invoice threshold: it's an aggregate monthly ceiling per supplier, designed to stop anyone splitting one large bill into many tiny ≤ 5,000 MAD lines to dodge the withholding.

Worked examples

Here is how the rule applies in practice (services, 20% VAT):

The 45,000 MAD example is explicitly confirmed by DGI practice: a 45,000 MAD TTC technical-assistance invoice with a certificate gives VAT of 7,500 MAD, of which 75% is withheld (5,625 MAD). An invoice of this size is never exempt, even though it is below 50,000 MAD.

Mechanism reminder: with a valid tax-compliance certificate (ARF), the client withholds 75% of the VAT and passes the remaining 25% to the supplier. Without an ARF, it withholds 100%. The supplier recovers the withheld VAT through its normal VAT return – it's a cash-timing shift, not a permanent loss.

Why the 50,000 monthly cap?

The monthly cap per supplier protects the administration against avoidance by splitting. Imagine a supplier issuing 40 small invoices of 4,900 MAD TTC in the same month (196,000 MAD in total): without the cap, each would be "exempt". With the 50,000 MAD/month/supplier cap, the exemption stops applying once the cumulative total passes 50,000 MAD – subsequent invoices become subject again.

In practice, a client paying several small invoices to the same supplier in a month must track the running total: as long as the monthly total of ≤ 5,000 TTC invoices stays under 50,000 MAD, they remain exempt; beyond that, the withholding kicks in.

The other RAS TVA exclusions

The 5,000 / 50,000 threshold isn't the only mechanism that takes an operation out of scope. CGI Article 117 provides two further exclusions.

1. Excluded sectors

Certain services are entirely outside the RAS TVA scope, regardless of their amount:

• sales of electrical energy and water delivered to public distribution networks;
• sanitation services provided to subscribers (as well as water and electricity meter rentals);
• sales and services of telecommunication operators;
• services rendered by any insurance broker or agent.

For these operations, no withholding is due, even above 5,000 MAD TTC.

2. The public-procurement buyer (goods and works)

For equipment goods and works (CGI Article 117-IV), the withholding normally applies at 100% of VAT when the supplier doesn't present an ARF. But there's a notable exception:

"...the State, local authorities and public establishments and other public-law entities [...] required [...] to apply the regulations relating to public procurement are not required to operate the withholding."

Public bodies subject to the public-procurement code are therefore exempt from the withholding on goods and works – but only on that branch. On services (Article 117-V), they remain required to withhold like any other buyer.

Practical checklist for businesses

1. Don't confuse the two thresholds – the per-invoice exemption is at 5,000 MAD TTC, not 50,000.
2. Track the monthly cumulative total per supplier – keep a record of all small invoices (≤ 5,000 TTC) per supplier per month; at 50,000 MAD, the exemption drops.
3. Request the ARF from every supplier – it brings the withholding down from 100% to 75% of VAT. Without it, you withhold the full VAT.
4. Identify your public-sector clients – if they're bound by public-procurement rules, they're exempt from withholding on your goods and works invoices.
5. Check the sector – telecom, insurance brokerage, energy/water and sanitation are out of scope: no withholding to operate or declare.
6. Declare via SIMPL-TVA – the withholding is paid online on the DGI portal, accompanied by a detailed statement.

Sources

• Direction Générale des Impôts (DGI) – tax.gov.ma
• VAT withholding at source – finances.gov.ma (DGI notice)
• General Tax Code 2026 – Articles 117-IV and 117-V
• DGI Circular Note n° 735 (implementation guidance)

Disclaimer

This article is provided for informational purposes only and does not constitute tax or legal advice. It is based on the 2026 General Tax Code and Finance Act n° 50-25 for 2026. Confirm the exact provisions with the DGI or a licensed advisor. For combined worked examples of the income withholding and the VAT withholding, see our worked-examples article.