Withholding taxes 2026: one month after entry into force, where it hurts — and how to get organised

What has applied since 1 July 2026

The 2026 Finance Act introduced an extended withholding tax regime whose first tier came into force on 1 July. Three mechanisms now coexist.

1. The 5 % withholding on services

Banks, insurance and reinsurance companies, along with private businesses whose turnover reaches 500 M DH, must withhold 5 % of the amount excluding VAT paid to service providers subject to IS: fees, commissions, brokerage, intellectual, technical, IT, consulting, training, marketing, accounting and administrative services. Sales of goods and material services remain outside the scope.

2. The VAT withholding

The same paying parties withhold 75 % of the VAT invoiced where the provider produces a valid tax compliance certificate — and 100 % in its absence. The certificate therefore becomes a commercial document in its own right: without it, the whole of your VAT is withheld.

3. The 5 % withholding on rents

Legal entities paying rent on business premises also apply a 5 % withholding.

One decisive technical point: the triggering event is the payment (settlement, making available or crediting to an account), not the invoice date. The rollout schedule is progressive: 500 M DH since 1 July 2026, 350 M DH on 1 January 2027, 200 M DH on 1 January 2028.

One month on: the three points of friction reported from the field

Service providers under cash-flow pressure

For a service provider working with large accounts, the combined 5 % withholding and VAT withholding can represent a gap of 20 to 25 % of collections, according to the analysis published by Médias24 in mid-July. These amounts are not lost — they are offset against your tax liabilities — but they leave the immediate cash cycle. Companies operating in cascading subcontracting chains face an amplified effect: each one is withheld from by its client before withholding from its own supplier.

Invoices straddling July

Is an invoice issued in June but paid in August subject to the withholding? The prevailing reading among practitioners — the triggering event being the payment — is yes, pending official clarification from the tax administration. This grey area makes precise tracking of invoice dates and settlement dates essential.

A real administrative burden

Qualifying each service (in scope or out of scope), checking the tax status and the certificate of every supplier, producing withholding returns, justifying the amounts withheld to providers: as many new tasks that accounting teams struggle to absorb on Excel.

What this changes in practice in your day-to-day management

Whether you are a paying party in scope or a provider subject to withholding, four workstreams are unavoidable:

• Configuring withholdings in your management system: the calculation (5 % excluding VAT, 75 %/100 % of VAT), the related accounting entries and the statutory returns must be automated — the volumes make manual processing untenable.
• An enriched supplier master file: tax compliance certificate (with its validity date), IS/IR status, qualification of services supplier by supplier.
• Reconciliation and partial collections: your customer payments now arrive net of the withholding; your accounting must automatically match the net amount received, the withholding to be offset and the original invoice.
• Adjusted cash-flow forecasting: build the 20 to 25 % gap into your cash plans if your client portfolio includes large accounts.

This is exactly the kind of reform where an integrated ERP makes the difference: with our Odoo clients, the withholding is calculated at the payment entry, the supplier certificate is tracked with an expiry alert, and withholding statements are produced in a few clicks. If your current tool cannot do this, that is a signal — and the 2026 Finance Act will send others (electronic accounting, accounting entries file, e-invoicing).

Frequently asked questions