Accounting records: what to keep, how to file them and for how long

When a tax audit begins, the tax inspector looks first not at the financial statements but at the documents behind them. An expense without a proper invoice is not deductible. VAT without a compliant invoice cannot be recovered. Accounts with missing documents can be rejected. Filing your supporting documents is therefore not about tidiness: it has a direct impact on your tax bill.

This guide sets out the legal obligations, the principles of a sound filing system and the costliest mistakes.

What the law says

The period: ten years

Two texts set the same period:

• Law No. 9-88 on the accounting obligations of traders requires accounting records and supporting documents to be kept for ten years (article 22);
• the General Tax Code (CGI) requires taxpayers, and anyone responsible for withholding tax at source, to keep the following documents for ten years, at their place of taxation (article 211):
  • copies of sales invoices or till receipts;
  • supporting documents for expenses and investments;
  • the general journal, the general ledger, the inventory book and the detailed inventories;
  • customer and supplier records;
  • any other document required by law.

This period is longer than the tax authorities’ four-year right of reassessment (article 232). One reason is that where losses or tax credits arising in time-barred years are set off against a period that is not time-barred, the right of audit can go back as far as the four preceding time-barred years, up to the amounts set off (article 232-III).

The format: increasingly electronic

Article 145-I of the CGI provides that the accounts must be kept in electronic format, in accordance with the laws and regulations in force. Introduced by the Finance Act (Loi de Finances) 2018, this obligation had been on hold pending an implementing regulation; the Finance Act 2026 removed that reference, and the obligation now applies. Taxpayers who keep their accounts electronically, or who are required to do so, must keep their accounting records in electronic form (article 211). The Directorate General of Taxes (DGI) refers to opinion No. 24 of the Conseil national de la comptabilité (National Accounting Council) of 14 June 2023. This opinion sets the criteria for computerised systems and requires an accounting entries file (FEC) to be produced for each financial year. In an audit, a copy of this file must be handed over (article 210).

The general journal and the inventory book must also be numbered and initialled (article 8 of Law No. 9-88).

Loss: fifteen days to report it

If accounting records are lost, for whatever reason, the business must inform the tax inspector by registered letter with acknowledgement of receipt within fifteen days of discovering the loss. The period is thirty days in cases of force majeure (article 211). A fire, theft or IT failure not reported in time is hard to rely on later.

What to keep: an overview

Without claiming to be exhaustive, the main categories of documents are:

• Sales: copies of invoices in their continuous sequence, credit notes, till receipts, contracts and purchase orders.
• Purchases and expenses: supplier invoices, expense claims with receipts, and service, lease and leasing contracts.
• Cash and bank: bank statements, evidence of payments and receipts, bills of exchange.
• Fixed assets: purchase invoices, deeds, depreciation schedules, disposal documents.
• Stock: detailed inventories by quantity and value at each year end (article 145-II of the CGI).
• Payroll and social security: employment contracts, payslips, payroll register, National Social Security Fund (CNSS) returns and receipts.
• Tax: returns and acknowledgements of receipt, payment notices, correspondence with the tax authorities.
• Legal: articles of association, minutes, registers, transfer deeds, related-party agreements.

The costliest pitfalls

1. The irregular invoice

To be deductible, an expense must be supported by a proper invoice showing the particulars required by article 145-III of the CGI, including the customer’s common company identifier (ICE) (article 146). A non-compliant invoice has two consequences:

• the expense is added back to taxable profit (article 11-III);
• the VAT (TVA) is not deductible (article 106).

The business can, however, put the document right during the adversarial phase of the audit (article 11-III). That still means tracking down the supplier and obtaining a corrected invoice.

2. Paying in cash

Expenses paid other than by crossed non-endorsable cheque, bill of exchange, card payment, bank transfer, electronic process or documented set-off are deductible only up to 5,000 dirhams (MAD) per day and per supplier, and no more than 50,000 dirhams per month and per supplier. Depreciation of fixed assets paid for in this way is not deductible (article 11-II). A similar rule limits the deduction of VAT (article 106-II).

So you need to keep not only the invoice, but also proof of how it was paid.

3. The defaulting or inactive supplier

Every purchase must be genuine. Where the tax authorities find that an invoice comes from a supplier that does not meet its filing and payment obligations and has no real activity, the deduction is refused. The DGI publishes on its website the list of tax identification numbers of these defaulting suppliers, once a final judgment has been given. The same rule applies to invoices issued by an inactive company within the meaning of article 228 bis (article 146). However, the tax authorities cannot reject these invoices if the customer holds a tax certificate issued during the financial year proving the supplier’s activity (turnover certificate, certified balance sheet, certificate of tax compliance). Requesting these certificates is part of keeping a sound file.

4. Rejected accounts

Where the irregularities are serious, the tax authorities can reject the accounts and reconstruct the profit (article 213). Serious irregularities include:

• failure to present accounts kept in accordance with article 145;
• missing inventories;
• concealed purchases or sales;
• serious and repeated errors, omissions or inaccuracies in recording transactions;
• missing supporting documents that deprive the accounts of any evidential value;
• failure to record transactions carried out;
• recording fictitious transactions.

5. Failing to produce documents

Failing to produce accounting records during an audit exposes the business to a fine of 2,000 dirhams, with, where applicable, a daily penalty of 100 dirhams per day of delay up to 1,000 dirhams (article 191-I). For businesses that keep their accounts electronically, failing to produce the records in electronic form is punishable by a fine of 50,000 dirhams per financial year (article 191 bis). Once the deadlines set in the formal notice have passed, the business faces an ex officio assessment (article 229).

Destroying accounting records before the end of the retention period in order to evade tax is subject to the criminal penalties in article 192.

The mistakes we see most often

1. Invoices made out to the manager rather than the company, or without an ICE.
2. Expense claims with no receipts or no link to the business.
3. Incomplete bank statements, which make reconciliation impossible.
4. Paper archives that fade: thermal receipts become unreadable within a few years.
5. Filing by date only, with no link between the document, the accounting entry and the payment. In an audit, finding a document then takes days.

How we can help

Good filing means that, from any line in the general ledger, you can find the document, its payment and confirmation of its compliance within minutes. In practice, we:

• design with you a filing system suited to your volumes and your tools, and get it ready for electronic accounting;
• check incoming invoices and payment methods for compliance as you go, rather than at the year end;
• flag missing or irregular documents while there is still time to put them right;
• prepare your file if you receive a notice of audit.

For day-to-day bookkeeping and review of your documents, see our accounting services and contact the firm.