VAT Exemptions: New Products List 2026 Morocco

Imagine walking into a local supermarket in Casablanca or a small grocery store in the Atlas Mountains. You pick up a liter of milk, a package of butter, and a bag of flour. For years, the prices of these essential goods have fluctuated, but a significant portion of their cost-effectiveness in 2026 is rooted in a complex legal framework designed to protect the purchasing power of Moroccan households.

As we navigate the fiscal landscape of 2026, the Moroccan government has introduced pivotal changes to the Value Added Tax (VAT) regime. Understanding which products are exempt and which carry a reduced rate is not just a matter for accountants and tax lawyers; it is essential knowledge for every consumer, business owner, and international investor operating within the Kingdom. In this comprehensive guide, we will explore the latest updates from the General Tax Code (CGI) and the Finance Law 2026, specifically focusing on the expanded list of VAT-exempt products and the legal mechanisms that keep essential goods affordable.

Legal Foundation: The Framework of VAT in Morocco

The Value Added Tax in Morocco is governed primarily by the General Tax Code (Code Général des Impôts - CGI). However, the specific applications, exemptions, and rate changes are updated annually through the Finance Law (Loi de Finances). For 2026, the legal landscape is shaped by a transition toward a more streamlined VAT system, aiming for a "neutral" tax that does not burden the end consumer of essential goods.

Primary Legislative References

1. Article 91 of the CGI: This is the cornerstone of VAT exemptions. It lists products and services that are exempt from VAT without the right to deduction. This means that while the final sale to the consumer has 0% VAT, the producer cannot reclaim the VAT paid on their own inputs.
2. Article 92 of the CGI: This article governs exemptions with the right to deduction (the "Zero-Rated" regime). This is highly beneficial for exporters and now, under the 2026 reforms, for specific strategic products like pharmaceutical components and certain agricultural inputs.
3. Article 121 of the CGI: This article defines the reduced rates (7%, 10%, and 14%) for specific products that do not qualify for full exemption but are deemed socially or economically sensitive.
4. Finance Law 2026 (Loi de Finances No. 50-25): This recent legislation introduced the "social VAT" adjustments, extending exemptions to a wider range of school supplies and agricultural fertilizers.
5. Decree No. 2.25.1041: This implementing decree provides the technical specifications for the quality and safety of juices, nectars, and milk-based drinks, which determines their eligibility for specific tax classifications.

The Moroccan VAT system is moving toward a simplified structure. By 2026, the goal is to converge toward two main rates (10% and 20%) while maintaining a robust list of 0% exemptions for "socially sensitive" products.

Practical Guide: Navigating the 2026 Exemptions

For businesses and consumers, identifying whether a product is VAT-exempt requires looking at both the nature of the product and its intended use. Below is the step-by-step procedure for applying these exemptions in 2026.

Step 1: Identify the Category of the Product

Under the 2026 guidelines, products generally fall into three "Exemption Zones":

• Essential Foodstuffs: Unprocessed or minimally processed items.
• Agricultural Inputs: Materials used to produce food.
• Social & Educational Goods: School supplies, medicines, and hygiene products.

Step 2: Verify the "Deduction" Status

It is critical to distinguish between Exemption without Deduction (Article 91) and Exemption with Deduction (Article 92).

• If you are a retailer selling bread, you do not charge VAT, but you cannot reclaim VAT on the electricity used in your bakery.
• If you are an exporter of sardines, you do not charge VAT on the export, and you can reclaim the VAT paid on the tin cans and oil.

Step 3: Required Documentation for Businesses

To benefit from exemptions on imports or large-scale domestic purchases (particularly for agricultural equipment), businesses must provide:

• A VAT Exemption Certificate (Attestation d'exonération) issued by the Direction Générale des Impôts (DGI).
• For agricultural equipment, a certificate proving the professional nature of the activity.
• Invoices must explicitly mention the legal article justifying the 0% rate (e.g., "Exonéré de la TVA en vertu de l'Article 91 du CGI").

Timelines and Costs

The 2026 VAT rates are applicable from January 1, 2026. There is no direct "cost" to apply for an exemption, but administrative delays in obtaining certificates from the DGI portal (accessible via the "E-Services" section of the DGI website) can take between 48 hours to 7 days.

Key Provisions Explained: The 2026 Product List

The Finance Law of 2026 has significantly expanded the list of products that Moroccans can purchase without the burden of VAT. Let’s break down the most important provisions.

1. Essential Foodstuffs (Article 91 & 121 Updates)

The government has maintained and expanded the list of basic necessities. As of 2026, the following are exempt from VAT:

• Milk and Butter: Raw milk and butter derived from animal origin remain exempt. Note that "milk-based drinks" containing less than 10% milk (as defined in Decree 2.25.1041) may be subject to different rates if they are classified as beverages rather than dairy.
• Bread and Flour: All types of common bread are exempt.
• Couscous and Pasta: A major update in 2026 is the full exemption of "short pasta" (pâtes alimentaires) to combat inflation in the dry goods sector.
• Sardines and Meat: Canned sardines and fresh/frozen meat (unprocessed) are exempt to ensure protein accessibility.
• Olive Oil: Locally produced, artisanal olive oil remains a staple of the exemption list.

2. School Supplies and Education

In an effort to support education, the 2026 list of exempt school supplies has been clarified. This includes:

• Exercise books, slates, and drawing paper.
• Glues, pencils, and erasers.
• Scientific calculators and specific educational software. This exemption applies both to domestic production and imports, ensuring that the "Back to School" season is more affordable for families.

3. Agricultural Inputs and Equipment

To support the "Generation Green" strategy, Article 123-13° of the CGI has been reinforced in 2026.

• Fertilizers (Engrais): The exemption now covers a wider range of organic and chemical fertilizers, whether imported or produced locally.
• Solar Pumps: As Morocco faces water scarcity, solar-powered water pumps for agricultural use are exempt from VAT to encourage sustainable irrigation.
• Livestock Feed: Compound feeds for cattle and poultry are exempt, provided they are used for professional farming.

4. Health and Hygiene

• Pharmaceuticals: Most essential medicines are now in the 0% category.
• Soap: Common household soap (solid) remains exempt under Article 91.
• Human Blood and Derivatives: A 2026 addition to the "Exemption with Deduction" list ensures that life-saving medical supplies are not taxed at any stage of the supply chain.

Common Mistakes & How to Avoid Them

Even with a clear list, many taxpayers and business owners fall into legal traps. Here are the most frequent pitfalls encountered in the 2026 fiscal year:

1. Confusing "Exempt" with "Out of Scope"

Some products are "out of scope" of VAT (like certain agricultural products in their raw state sold by farmers), while others are "exempt." The difference matters for your accounting. If a product is exempt under Article 91, you still have reporting obligations even if the tax is zero.

2. Misclassifying "Processed" Goods

A common mistake involves the "transformation" of products. For example, raw fish is exempt. However, if that fish is processed into a luxury ready-to-eat meal with added sauces and preservatives, it may attract the standard 20% rate. Always refer to the technical definitions in the CGI to see where "essential" ends and "processed" begins.

3. Missing the "Right to Deduction" Distinction

Businesses often fail to realize that if they sell products exempt without the right to deduction (Article 91), they must treat the VAT they paid on their own purchases as a cost. This can lead to pricing errors and reduced profit margins. Using AI Contract Review in Morocco can help businesses ensure their supplier agreements correctly reflect these tax realities.

4. Incorrect Documentation for Imports

When importing solar panels or agricultural machinery, simply claiming they are for a farm is not enough. You must have the specific exoneration certificate before the goods reach customs. Failure to do so results in the immediate application of the 20% VAT, which can take months to recover through a refund claim. For more on this, see our guide on Import & Export in Morocco: Customs, Duties, and Trade Regulations (2026).

Conclusion with Key Takeaways

The 2026 VAT reforms in Morocco represent a significant step toward social equity and economic modernization. By exempting essential goods like pasta, school supplies, and agricultural inputs, the government is utilizing the General Tax Code as a tool for social stability. For businesses, these changes require a high level of compliance and a deep understanding of the distinction between the various exemption regimes.

Whether you are a consumer benefiting from lower prices at the checkout or a business owner optimizing your tax strategy, staying informed about the latest circulars from the DGI is paramount. As the Kingdom continues to harmonize its tax system, the list of exempt products will likely remain a dynamic and vital part of the Moroccan economy.

• VAT is not a one-size-fits-all tax: Always check if your product falls under Article 91 or 92.
• 2026 is the year of "Social VAT": Focus on education, health, and basic nutrition.
• Documentation is king: Never assume an exemption applies without the proper DGI certificate.
• Stay Updated: Fiscal laws change every December; always consult the latest Finance Law.

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