Can Agricultural Cooperatives Get Tax Exempt Status?

Yes, subject to conditions. Cooperatives and their lawfully constituted unions are exempt from the IS, provided that their statutes, operation, and transactions are recognized as compliant with the legislation governing their category (art. 6). This exemption is, however, granted only under the conditions set out in article 7.

The two cases provided for (art. 7). The exemption applies:

• when the cooperative's activity is limited to the collection of raw materials from members and their marketing;
• or when, in the case of an activity involving the processing of the collected raw materials (with equipment similar to that of industrial enterprises subject to the IS) and the marketing of the processed products, its annual turnover remains below ten million (10,000,000) dirhams excluding VAT.

In concrete terms: if your cooperative merely collects and sells its members' production, the exemption applies. If it processes that production, it remains exempt as long as its turnover excluding tax does not exceed 10 million dirhams. Beyond this threshold, the processing activity falls outside the scope of the exemption. Be sure to check that your cooperative is indeed lawfully constituted and compliant with its regulations (art. 6).