VAT on personal construction exceeding 300m² replaced by contribution, The Social Solidarity Contribution on self-deliveries of personal housing construction, introduced by the 2019 Finance Law in Morocco, represents an important change in taxation related to personal construction , aims to increase tax compliance and transparency in the construction sector. The amount varies between 60 and 150 dhs/m² depending on the area covered, and its declaration must be made annually before the first of March. There are also penalties for late or inaccurate declarations.
This article will detail the many facets of this contribution, covering its application, pricing, exemptions and reporting obligations. We'll be asking: How does this contribution affect individuals and associations in their construction projects? What role does your architect or surveyor play in the process? Dive into this article for in-depth answers to these crucial questions and more.
Definition of taxable persons
The Contribution Sociale de Solidarité sur les livraisons à soi-même de construction d'habitation personnelle targets a specific range of players in the real estate sector. These include:
- Individuals building homes for their own use. These are individuals undertaking personal construction projects, regardless of their profession or financial situation.
- Family non-trading real estate companies (sociétés civiles immobilières familiales), which are family groups formed for the purpose of carrying out real estate projects for family use.
- Housing cooperatives and housing associations, which pool their members' resources to build collective or individual housing units to meet their members' housing needs.
The aim of these tax provisions is to ensure a fair contribution among homebuilders, thereby promoting transparency and tax compliance in this sector.
Categories of buildings concerned
The Contribution Sociale de Solidarité covers various types of construction, including :
- New buildings: All new residential buildings with a surface area exceeding 300m².
- Extensions: Enlargements or extensions to existing properties that increase the total surface area beyond the 300m² threshold.
- Major renovations: Renovation projects that substantially transform the structure or use of a dwelling, resulting in a reassessment of the covered area.
This classification encompasses a broad spectrum of real estate projects, with the aim of ensuring that any significant construction is tax efficient, within the framework of current tax legislation.
VAT on personal construction" pricing and declaration procedures
Contribution calculation methods
The method for calculating the social solidarity contribution for personal constructions in Morocco is based on the covered surface area of the construction. Here's how the calculation works:
- For areas of 300 sq.m or less, no contribution is required, as the construction is exempt.
- If the area covered is between 301 and 400 m², the contribution is calculated at a rate of 60 dirhams per square meter.
- For covered areas between 401 and 500 m², the applicable rate is 100 dirhams per square meter.
- When the surface area exceeds 500 m², the contribution is 150 dirhams per square meter.
To calculate the total contribution, the area covered by the applicable band is multiplied by the corresponding tariff.
Extract from the 2024 General Tax Code
Declaration procedure
For optimum compliance with tax directives, the procedures for declaring the Contribution Sociale de Solidarité are detailed as follows:
- The deadline for submitting the declaration is ninety (90) days from the date of issue of the building permit.
- The documents to be enclosed are specific to the type of property:
- For single-family dwellings: please enclose the building permit and the building authorization, making sure that the area covered in square meters is clearly indicated.
- For condominiums: the building permit must be accompanied by a plan or other supporting documents specifying the built surface area of each unit.
- A certificate of the surface areas covered, drawn up by an architect or a topographical surveyor, is also required by certain authorities.
- It is important to note that buildings with a covered surface area of 300 square meters or less are exempt and therefore do not require a declaration.
- The fixed rate of 60 DH per square meter remains in force for constructions with building permits granted before 01/01/2016.
- Concerning late declarations:
- A 5% surcharge is applied if the delay does not exceed 30 days.
- After this period, the surcharge rate rises to 15%.
- In the event of late payment, penalties are 10%, reduced to 5% if the delay does not exceed 30 days, with a further increase of 5% for the first month of delay and 0.5% for each additional month or fraction of a month.
These guidelines specify the steps to be followed by manufacturers, and highlight the consequences of failing to meet reporting obligations within the allotted time.
Social solidarity contribution declaration form
Before March 01, 2024 for homes under construction
Tax regulations require taxpayers, with the exception of individuals building personal dwellings of less than 300 square meters, to declare the cost of their constructions annually. This obligation applies to buildings from the start of construction through to the granting of planning permission, with a filing deadline set for the end of February each year.
Declaration content and procedures
The declaration, to be made on an official form provided by the tax authorities, must include a detailed statement of costs. Information required includes:
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Invoice and contract information:
- Invoice reference or accounting statements for turnkey projects.
- Surname, first name and company name of supplier.
- The company's common tax identifier.
- Description of goods, works and services.
- Amount excluding value-added tax and amount including tax.
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Terms of payment:
- Details of payment method and references.
Special cases and required certificates
For off-market turnkey construction, a certificate of the cost of the work, issued by a specialist architect, is required. This attestation, or a copy of the contract, must accompany the declaration for the first year of work, thus reinforcing transparency and tax compliance.
Conclusion
In conclusion, the introduction of the Contribution Sociale de Solidarité on self-deliveries of personal housing construction in Morocco, replacing VAT on personal constructions exceeding 300m², represents a significant measure to promote tax compliance and transparency in the construction sector. This contribution targets a specific range of builders, including individuals, family real estate companies and housing cooperatives, and aims to ensure a fair contribution among them.
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