• What is VAT reverse charge?

• In which cases does the reverse charge of VAT apply?

• How is the reverse charge of VAT done?

1. What is VAT reverse charge?

Reverse charge is a mechanism that allows the tax administration to ensure the collection of VAT directly from the end customer.
In principle, VAT is paid by the end consumer to the company that sells him a good or service. The latter is responsible for collecting this VAT, deducting the VAT it has borne on these purchases and paying the balance to the State.
The self-liquidation mechanism consists for this company in not collecting VAT from the end customer by invoicing him only the amount excluding VAT (HT). It is the customer who must pay the VAT directly to the State.

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2. In which cases does reverse charge of VAT apply?

The reverse charge of VAT applies in the case of transactions between a foreign company, not registered for tax purposes in Morocco, which sells services to a client established in Morocco. With this mechanism, the foreign company is not required to register in Morocco to collect and remit VAT. It is his client who takes care of it. It should be noted that a customer not identified for tax purposes, an individual for example, cannot operate the reverse charge. Only natural and legal persons registered for tax purposes can apply it.

3. How is the reverse charge of VAT done?

In the event of reverse charge of VAT, the customer becomes liable for VAT on the transaction concerned. In practice, it has a dual role for the same operation:

He is liable for VAT instead of his supplier
He recovers the VAT on his purchase as a customer
Consequently, the transaction is in principle neutral for the customer, provided that he benefits from the right to deduct VAT in the context of his activity and in relation to the transaction concerned (nature of the service, etc.).