I get a lot of questions about the auto-entrepreneur status in Morocco, and especially the 2% taxation part. Why not paying 2% instead of +35%? And why spend too much time creating a company when you can get this status in no time?
All these are good questions, and we’ll answer them in this post. The auto-entrepreneur status is indeed good for some people. But not as good when you see some of its drawbacks (presented last in this post).
So, here’s all what you need to know about the auto-entrepreneur status in Morocco:
1. Who can get the auto-entrepreneur status?
Anyone with a valid national ID card (CIN) can get an auto-entrepreneur status. If you work in the private sector, there is no problem. However, check your contract to see if you can do freelance jobs on the side. It’s usually not permitted.
If you work in the public sector, it may be illegal to have an auto-entrepreneur status. Double-check before going this path.
2. You need to make less than 200k (or 500k) MAD per year
There are two categories in the auto-entrepreneur status:
- Services: If you are selling a service, you are part of this category. If you’re a freelancer or working online, you’re part of this category. You need to make less than 200k MAD per year to be eligible.
- Commerce: If you are selling physical products, you are part of this category. You need to make less than 500k MAD per year to be eligible.
In both cases, if you make more than what’s allowed for two consecutive years (200k and 500k respectively), you are no longer able to use the status. In this case, you should create a company instead.
3. The taxation
For services, you get taxed at 2%. For commerce, you get taxed at 1%/. In both cases, you’re taxed on the money you make, not the profit. This may be a little confusing, so let me give you an example:
In order to do you work, you need some materials. This can be your laptop, wood, vegetables… depending on your work. Let’s say you spent 10k on this.
Then you hit the market with your creations and you sell them for 30k.
Here’s how taxation works:
- In the auto-entrepreneur status, you get taxed on the 30k you made.
- If you had a company, you’ll get taxed on the 30k – 10k = 20k, ie, the profit.
Taxation happens every 3 months and can be done online. Head to the auto-entrepreneur website, add your declaration and pay online. Or print the document and head to the nearest post office if you prefer.
4. International working with the auto-entrepreneur status
Update 28/12/2020: This section was added after few researches. More on this Twitter thread.
Even if the official site states you can not use the auto-entrepreneur status to export your services, that information is old and incorrect. You can use your auto-entrepreneur status to work internationally online. You only need two extra steps in addition to what’s described above:
- Whenever you do a service and get paid, you have a 90 days period to get that money into a Moroccan bank account.
- Once a year, before the end of April, you need to fill a document with the total amount of services exported using the Modele 6 page 9 in this PDF.
I work online, how can I do it legally?
- Understand how taxation works and in which cadence you should pay it.
- Get your health insurance in CNSS or a private insurance company.
- Know how you can benefit from the legal system and reduce your taxes.
- Get help with real examples and real numbers.
- Get an Excel sheet to calculate your taxes at any moment.
5. You don’t have a healthcare plan
With the auto-entrepreneur status, you don’t have a healthcare plan nor a pension plan. This isn’t the same as being employed where you have the CNSS and everything.
That said, you can get your own health insurance if you want. Head to our article to learn more about this.
For your pension, it’s also easy. You can open a pension account on any bank you want. Just head to the nearest bank and ask for it. The offers are usually the same for all banks.
6. The auto-entrepreneur status doesn’t mean a thing for some
This is the biggest drawback of the auto-entrepreneur status. If you go to ask for a visa, for example, this status doesn’t mean a thing. Being an auto-entrepreneur doesn’t ring a bell for embassies. Why? Because they can’t trace back from where you got the money.
If you were an employee, they know at least your salary is coming from a company and the said company is regulated. But when you’re an auto-entrepreneur, they don’t have that assurance. And they will reject your application.
I know a lot of people who got their applications rejected for this. Don’t try it.
As a recap to this. You should get an auto-entrepreneur status if:
- You are a Moroccan
- You just started working independently and don’t make more than 200k MAD/year for services. And 500k MAD/year for commerce.
- You plan to get your own health insurance and pension
- You don’t plan to travel outside of Morocco
If that’s the case, get an auto-entrepreneur status. Otherwise, get a company.