Increase in TVA

[Lee Filkins]

" We were all led to believe that Morocco was all for developing into a first class tourist destination specially on the second home front? they shoved down Plan Azur 2010

In comes a new Finance Minister and his contribution a little bit of magic by.... increasing the TVA from 14% to 20%." besides the following

a) VAT on rental Income. Something that has been touted as tax free for 5 years

b) Charging VAT on mortgage interest rate. Only country in the world to charge interest rate on an fiscal instrument. This you will be paying for mortgage period.


I find it hard to believe that a Country who suppose to be encouraging inward investment would act in this blatant milking the investor.

 

[roksy]

hi camel i am agree with you .
they are not encouraging investments but they dont care anyway i advise the people who have propertys in morocco to sell and go somewhere else it is to expensive and got no base, it is overpriced and the dealers ere telling people a lot of lies.exemples:
#10min from tetouan aeroport(this aeroport is not open and will never be).
#6%rental incom(-20%tax) imposibe to achive .
#tangier sandy beach.yes sandy but not suitable for swimming.etc...

 

[redangel7861]

Camel.

You seem to have a concerted effort against investing in Morocco. So I can't take what you say seriously. I'll have to confirm your VAT claims on Mortgages and rent.

I was always under the impression that VAT was charged on purchases (payables) and not receivables (income). Increasing VAT on off plan from 14% to 20% can be backed up as it is a payable. The government are just bringing VAT on off-plan in line with what they charge for other payables.

I very much doubt that VAT is payable on rent as this is a reciveable (again I'll have to confirm this). With regards to mortgages, if you take out a UK mortgage to fund your purchases then how the hell can the Moroccan Government charge VAT on a UK product. I assume you mean VAT on Moroccan mortgage products. Again I'll have to confirm that your information is correct on this.

Again, I will have to take your information with a pinch of salt, as you seem very negative towards investment in Morocco. Have you invested in Morocco, if not then what are you doing on thses boards. If your information is incorrect (which I will have to confirm),then your motives will have to be questioned by others as you obviously have a hidden agenda.

 

[redangel7861]

Camel.

I have spoken to various contacts both in the UK and Morocco regarding your claim that VAT will be charged on Rent and Mortgages. They are un-aware about your claims, I have also checked through archives and there is no mention of this VAT charge on rental and Mortgages. If you are going to make such claims please provide your source or any literature you can reference this claim to. If I am wrong then I will gladly apologise, if not then please stop spreading mis-information, which again would bring into question your motives.

 

[just-alex]

mortgage TVA

Camel.

I have spoken to various contacts both in the UK and Morocco regarding your claim that VAT will be charged on Rent and Mortgages. They are un-aware about your claims, I have also checked through archives and there is no mention of this VAT charge on rental and Mortgages. If you are going to make such claims please provide your source or any literature you can reference this claim to. If I am wrong then I will gladly apologise, if not then please stop spreading mis-information, which again would bring into question your motives.

I was told by my Moroccan bank manager that TVA is payable on Moroccan mortgages. This is not new!!!!

There is so much mis information being bandied about here.....It is not necessary to get into slanging matches!!!!

 

[redangel7861]

Alex.

No need to shout.

May I ask which Moroccan bank you were refering to.

 

[Lee Filkins]

subject

MY REPLY IS IN BLOCK CAPITAL

"You seem to have a concerted effort against investing in Morocco."

NOT CORRECT, I HAVE INVESTED THERE.

So I can't take what you say seriously.

I DO NOT WANT YOU OR ANYBODY ELSE TO TAKE ME SERIOUSLY OR NOT. IF YOU DO NOT BELEIVE ME, TIME WILL TELL YOU.

I'll have to confirm your VAT claims on Mortgages and rent.

PLEASE DO SO, FRANKLY I AM SHARING MY INFO WITH YOU ALL. I REALLY DO NOT CARE IF PEOPLE ACCEPT/BELEIVE WHAT I HAVE TO SAY.


I was always under the impression that VAT was charged on purchases (payables) and not receivables (income).

PLEASE FIRST CHECK OUT WHAT IS OUTPUT VAT AND INPUT VAT.


Increasing VAT on off plan from 14% to 20% can be backed up as it is a payable.

I AM NOT CONCERNED IF ITS BACKED UP OR NOT PEOPLE WHO HAVE BROUGHT PROPERTIES EXCLUSIVE OF VAT WILL NOT BE CHARGED THE EXTRA 6%. MY CONTRACT IS INCLUSIVE OF VAT SO IT DOES NOT MATTER TO ME. ITS FOR PEOPLE WHO HAVES CONTRACT EXCLUSIVE OF VAT AND THE ONES RESERVING NEW PROPERTIES.

The government are just bringing VAT on off-plan in line with what they charge for other payables.

YES, THEY MAYBE DOING THIS. I AND THE OTHER BUYERS ARE NOT THE GOVERNMENT AND THIS MEANS WE PAY 6% EXTRA. WHILST THIS IS FINE BUT THAN THE GOVERNMENT SHOULD NOT BE MISLEADING INVESTORS AS TO ITS INVESTOR FRIENDLY CREDENTIALS

I very much doubt that VAT is payable on rent as this is a reciveable (again I'll have to confirm this).

NO POINT DOUBTING IF YOU DONT HAVE THE BACKGROUND.


With regards to mortgages, if you take out a UK mortgage to fund your purchases then how the hell can the Moroccan Government charge VAT on a UK product.

YOU ARE CORRECT. BUT WE ARE NOT TALKING ABOUT UK MORTGAGES WE ARE TALKING ABOUT MOROCCAN MORTGAGES


I assume you mean VAT on Moroccan mortgage products. Again I'll have to confirm that your information is correct on this.

PLEASE DO BEFORE YOU BECOME SKEPTICAL

Again, I will have to take your information with a pinch of salt, as you seem very negative towards investment in Morocco.

YOU TAKE IT WITH SALT OR WITH MINT TEA. IF YOU HAVE INVESTED AND YOU HAVE NOT OBTAINED THE FUNDAMENTAL INFORMATION BEFORE YOU COMMITTED YOUR MONEY BRINGING REAL CORE ISSUES NO MATTER HOW UNPLEASENT/NEGATIVE THEY ARE THATS FINE. I LET THE AGENT TELL YOU ALL THE POSITIVE THINGS, SIMPLY BUYING DOES NOT MAKE YOU AN INVESTOR

Have you invested in Morocco,

YES, STATED ABOVE

if not then what are you doing on thses boards.

ITS NOT AN REQUIREMENT TO HAVE BEEN BOUGHT TO BE ON THE FORUM.

If your information is incorrect (which I will have to confirm),

I DONT NEED TO JUSTIFY TO YOU OR ANYBODY ELSE. THE INFO AND ADVISE FOR FREE TAKE IT OR LEAVE IT. I KNOW WHAT I NEED TO DO.

then your motives will have to be questioned by others as you obviously have a hidden agenda.

I AM CONCERNED ABOUT THE WAY YOU THINK AND AS IF MY HIDDEN AGENDA IS GOING TO DERAIL THE COUNTRY'S PLANS.



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Last edited by redangel7861 : Today at 07:47 AM.

 

[redangel7861]

Camel.

Throwing stones and glass houses and all that.

I think you need to calm down and take a chill pill. I am aware of VAT input and output.

The 6% increase does not effect me as all my purchases are inclusive of VAT - so no problems there. Again, I need to confirm your claims and will get back to you once I have.

Note: My source is not an agent.

 

[Aegean]

MY REPLY IS IN BLOCK CAPITAL

"You seem to have a concerted effort against investing in Morocco."

NOT CORRECT, I HAVE INVESTED THERE.

So I can't take what you say seriously.

I DO NOT WANT YOU OR ANYBODY ELSE TO TAKE ME SERIOUSLY OR NOT. IF YOU DO NOT BELEIVE ME, TIME WILL TELL YOU.

I'll have to confirm your VAT claims on Mortgages and rent.

PLEASE DO SO, FRANKLY I AM SHARING MY INFO WITH YOU ALL. I REALLY DO NOT CARE IF PEOPLE ACCEPT/BELEIVE WHAT I HAVE TO SAY.


I was always under the impression that VAT was charged on purchases (payables) and not receivables (income).

PLEASE FIRST CHECK OUT WHAT IS OUTPUT VAT AND INPUT VAT.


Increasing VAT on off plan from 14% to 20% can be backed up as it is a payable.

I AM NOT CONCERNED IF ITS BACKED UP OR NOT PEOPLE WHO HAVE BROUGHT PROPERTIES EXCLUSIVE OF VAT WILL NOT BE CHARGED THE EXTRA 6%. MY CONTRACT IS INCLUSIVE OF VAT SO IT DOES NOT MATTER TO ME. ITS FOR PEOPLE WHO HAVES CONTRACT EXCLUSIVE OF VAT AND THE ONES RESERVING NEW PROPERTIES.

The government are just bringing VAT on off-plan in line with what they charge for other payables.

YES, THEY MAYBE DOING THIS. I AND THE OTHER BUYERS ARE NOT THE GOVERNMENT AND THIS MEANS WE PAY 6% EXTRA. WHILST THIS IS FINE BUT THAN THE GOVERNMENT SHOULD NOT BE MISLEADING INVESTORS AS TO ITS INVESTOR FRIENDLY CREDENTIALS

I very much doubt that VAT is payable on rent as this is a reciveable (again I'll have to confirm this).

NO POINT DOUBTING IF YOU DONT HAVE THE BACKGROUND.


With regards to mortgages, if you take out a UK mortgage to fund your purchases then how the hell can the Moroccan Government charge VAT on a UK product.

YOU ARE CORRECT. BUT WE ARE NOT TALKING ABOUT UK MORTGAGES WE ARE TALKING ABOUT MOROCCAN MORTGAGES


I assume you mean VAT on Moroccan mortgage products. Again I'll have to confirm that your information is correct on this.

PLEASE DO BEFORE YOU BECOME SKEPTICAL

Again, I will have to take your information with a pinch of salt, as you seem very negative towards investment in Morocco.

YOU TAKE IT WITH SALT OR WITH MINT TEA. IF YOU HAVE INVESTED AND YOU HAVE NOT OBTAINED THE FUNDAMENTAL INFORMATION BEFORE YOU COMMITTED YOUR MONEY BRINGING REAL CORE ISSUES NO MATTER HOW UNPLEASENT/NEGATIVE THEY ARE THATS FINE. I LET THE AGENT TELL YOU ALL THE POSITIVE THINGS, SIMPLY BUYING DOES NOT MAKE YOU AN INVESTOR

Have you invested in Morocco,

YES, STATED ABOVE

if not then what are you doing on thses boards.

ITS NOT AN REQUIREMENT TO HAVE BEEN BOUGHT TO BE ON THE FORUM.

If your information is incorrect (which I will have to confirm),

I DONT NEED TO JUSTIFY TO YOU OR ANYBODY ELSE. THE INFO AND ADVISE FOR FREE TAKE IT OR LEAVE IT. I KNOW WHAT I NEED TO DO.

then your motives will have to be questioned by others as you obviously have a hidden agenda.

I AM CONCERNED ABOUT THE WAY YOU THINK AND AS IF MY HIDDEN AGENDA IS GOING TO DERAIL THE COUNTRY'S PLANS.



--------------------------------------------------------------------------------
Last edited by redangel7861 : Today at 07:47 AM.

Take it with a pinch of salt - he could be somebody who has invested there and doesn't want any negitive information being posted as it may impact on his investments.

Think most people would try and protect there investments by commenting on posts that have not been confirmed yet.

 

[Lee Filkins]

Subject

Aegean: If individual/small investor can think that they can prop up their investments by coming onto forums which a very small % of people read. Than I am afraid they had not much confidence in the product/market in the first placedon.

Red Angel: I am completely chilled. It was your posting which was aggressive and consistently wanting me to confirm to you.

As you claim that you know about about Input/Output VAT. You will than realise that if you are not registered for VAT than you cannot claim it back.

Another thing what ever your sources are may not have told you that as a non resident you cannot obtain more than one mortgage in Morocco further you will not get a mortgage for VAT element of it.

You may also want to know that in France the VAT is 19.6% on properties. Morocco has been taking across many french rules, system as their basis. needles to say the economies are far apart.
Y

 

[Don Quijote]

Yes, one must pay VAT on the interest of the Moroccan mortgage monthly quotes. Currently this insterest is subject to 10% VAT.

As for the increase of the VAT, I fully agree I may seem like a measure willing to "milk investors". I was recently given an explanation by Garrigues Abogados saying that developers were supporting 20% VAT on construction materials, but only collecting 14% when selling a property. Therefore the government decided to pair up the %, upsetting everyone. In most cases the contracts reflect VAT included, so the developers must swallow the bitter pill. However it is not always as clear and some investors are now discussing who should pay for the extra taxes.

Another thing I find unbelievable is the fact that one pays Land Registy fees and Stam duty (Registrament and Conservation Fonciere) on the full price WITH TAXES,. Therefore, one pays 3% plus 1% on the price plus the extra 20% VAT, thus paying an extra 0.6% and 0.2% fees....Something unheard of, and yet people seem not to complaint.

 

[Lee Filkins]

subject

Don Quijote:
You have raised some interesting point. I would like to expand on it.
" Garrigues Abogados saying that developers were supporting 20% VAT on construction materials, but only collecting 14% when selling a property."

On a simplistic scenario this means that the developers are claiming the 6% every time they do their VAT return from the authorities. Generally speaking the component of a finished product would be land 33.33%, construction cost 33.33% and profit 33.33%. So the 20% on 33.33% claimed on materials leaves plenty of beef.

It is fundamental of taxation that taxes should not be charged on Taxes whether they are direct or indirect Taxes.

In a Country where people are not financially astute or are to afraid to ask due to authorities heavy handedness or dare I say that a very large number of people are not affected on a day to day basis. The foreigners are treated as rich pickings and are milked for it. A policy that has been applied in other developing Countries. People wise up to it and this later affects the Country.

In the case of Morocco it does not matter as all this will go into the Kings and his families pockets.

I personally do not have a problem with, in the manner a country sets out its fiscal and other laws. I object to lack of transparency and being treated differently from the locals.

 

[just-alex]

HI, i READ SOMEWHERE THAT IN mOROCCAN LAW ALL FIXED CHARGES AND FEES WHICH CANNOT BE AVOIDED SHOULD BE INCLUDED BY LAW IN THE PRICE.........

 

[Lee Filkins]

subject

Just Alex:
Can you be more precise. What fixed charges ? What fees ? what do you mean by, cannot be avoided ? should be included in the price, Price of what ???

 

[just-alex]

will have to go back to my suitcase full of legal stuff in storage but I remember reading the new off plan purchasing law I think, which states lots of things like no payments before the foundations are in, purchasers reponsibility to chase communication, and unavoidable charges to be included in price such as I assume, anything which is payable as a tax to the developer or the governemnt This would also apply under the 'UK code of Marketing' for any prices quoted in this country when the property was reserved.
sorry can't be more precise without research again.......perhaps you could remind me what the add ons are ? I remember a total of about 5.5% being discussed which included some taxes I think......???

 

[The Soup Dragon]

Tax of mortgage interest rates is something that I don’t think any of us considered when taking the plunge with investing in Morocco. (I certainly didn’t.) However, with hindsight I can see that it is a possibility that may have been on the Government’s radar for some time. After all, most people buying in Morocco are looking to finance purchase with a Moroccan mortgage – so they know they can get away with it.

VAT has been increased to 20%. Most developers are absorbing the hike as their contracts with us say that price includes VAT. It’s that simple. I don’t want to knock any developers that may have tried to change the Government’s decision and sighted how they have to pay 20% VAT for materials and yet purchase prices doesn’t reflect the increased VAT. It’s only natural that they want to protect their profits.

 

[just-alex]

Yes, some developers were ok about this , but others used it as a stick to beat their clients into signing for completion before the site was properly habitable or property finished to the publicised level of quality........its quite simple really.....if contracts are inclusive of TVA , after the initial panic and research, one should have decided to resist the stressful pressure.....after all some properties were actually constructed a long time ago . Its the Developer who has been playing catch up with the rest of the infrastructure etc.....and it is that delay which has landed some people with the stress of being pressured to sign before the increase. That is therefore not the fault of the client and the developers should not have attempted to pass it on other than to new clients ..Yet,even if the contract did not state that the price was inclusive of TVA I think it could be challenged. Pricing should be clear and transparent. As far as the other small 'non optional' extra% go I believe they are supposed to be written into the contract too, not added on after.....it should only be notaires fees that are extra..............

 

[Lee Filkins]

Subject

"Yet,even if the contract did not state that the price was inclusive of TVA I think it could be challenged."

HOW ARE YOU GOING TO CHALLANGE ?? AND WITH WHOM. THE CONTRACTS ARE PRIVATE. THE DEVELOPERS WILL NOT RESPOND OR GET INTO ANY COMMUNICATIONS AND YOUR AGENT WILL PLAY YOU AGAINST THE DEVELOPER. REMEMBER ONCE YOU HAVE BOUGHT THE AGENT WANTS TO KEEP THE DEVELOPER SWEAT.

THE DEVELOPERS, A LARGE MAJORITY OF THEM ARE SPANISH OR HAVE SET UP A MOROCCAN COMPANY, ARE WELL EXPERIENCED IN EVADING ISSUES AND GIVING THE BUYERS A MERRY GO ROUND. THEY THE DEVEOPERS, HAVE LEFT A STRING OF DISASTERS ON THE COSTAS AFFECTING MANY PEOPLES LIVES AND LIFE TIME SAVINGS IN JEOPARDY.

"Pricing should be clear and transparent"

NOT IN MOROCCO, AND WITH THE DEVELOPERS THAT ARE PLAYING THE FEILD.

 

[just-alex]

Camel x3 ....Have sent you a PM...but briefly there are laws in Morocco but they are being ignored by 'developers'......Moroccan barristers are not happy about what is happening in their country and are pleased to take a case using these laws..........actually the Moroccan system is probably more sympathetic than the UK system where off plan property is concerned................so lets have less talk and more action please!!!!

 

[Lee Filkins]

subject

Morocco has taken over the French system. In my experience the French system offer the greatest protection to a buyer. Sadly like in all third world Country the legal system does not work ( Spain is a good example ) Lawyers have been threatened with their life & their family.

A lawyer/Judge can be bought in this instance and you can see the law is flouted openly and do you think the people in the know and the ones that matter are not aware of the position. They have been bought out.

For reasons above and the time it take to win your case and than if the developer appeals could be 15 years and by that time the developer has wounded up and you will list an unsecured creditor. I know that a land dispute case in India took 36 years to come to its conclusion, the petitioner had died and his children carried the case through.