Morocco

Last modified: 23/04/2024 06:36

Corporate taxation

Cases	2023	2024	2025	2026
Taxable profit (” BNF “) < or equal to 300.000 MAD	12,5%	15%	17,5%	20%
Industrial Acceleration Zones and Casablanca Finance City (independent of BNF)	16,25%	17,5%	18,75%	20%
Enterprises A*, higher of BNF > or = 100.000.000 MAD	23,75%	27,5%	31,25%	35%
Enterprises A* 1.000.000 MAD < BNF < 100.000.000 MAD	20%	20%	20%	20%
Other Enterprises 300.000 MAD < BNF < or = 1.000.000 MAD	20%	20%	20%	20%
Enterprises, who signed an agreement with the governement (inves.1,5 MM MAD)	20%	20%	20%	20%

*Enterprises A: Hotels, Sports, Tourism, Mines, Export, agriculture products, offshoring, etc.

	2023	2024	2025	2026
Industrial enterprises BNF < 100.000.000 MAD	24,5%	23%	21,5%	20%
Enterprises between 1.000.000 MAD < BNF < 100.000.000 MAD	28,25%	25,5%	22,75%	20%
Enterprises with BNF > or = 100.000.000 MAD	32%	33%	34%	35%
Financial institutions and insurance companies – (independent of BNF)	37,75%	38,5%	39,25%	40%

Residence: A company is resident in Morocco if it is incorporated in Morocco or if its effective place of management is in Morocco.

Basis: Morocco applies a territorial tax system. Companies (resident and non-resident) are generally subject to corporation tax only on income generated by activities carried out in Morocco. Foreign companies are subject to tax on income arising in Morocco if they have or are deemed to have a permanent establishment in Morocco.

Taxable income: Businesses are taxed on the difference between their business income and expenses. Business expenses incurred in carrying on the business are generally deductible, unless they are specifically excluded. Some of the non-deductible expenses: interest on shareholder loans when the stock is not fully paid-up, interest on shareholder loans above the official annual interest rate, penalties and fines, expenses not related to the company’s business.

Significant local taxes on income: The finance law for the 2023 financial year introduced a reform of the corporate tax rate over a period from 2023 to 2026 with the objective of reaching a unified rate of 20%, or 35% (for a taxable income equal to or greater than 100 million dirhams) in 2026. A 40% rate applies to leasing companies and financial institutions.

• Companies operating in industrial acceleration zones and industrial companies (see Decree) benefit from a total exemption from corporate tax for the first 5 consecutive financial years, from the date of the start of their operation. • Service companies with the status of Casablanca Finance City benefit from the total exemption from corporate tax for 5 consecutive years from the 1st year of granting the aforementioned status, within the limit of 60 months following the date of incorporation. • The Tangier-Mediterranean Special Agency, as well as the companies involved in the realization, development, operation and maintenance of the Tangier-Mediterranean Special Development Zone project and which set up in the industrial acceleration zones referred to in Article 1 of Decree-Law No. 2-02-644 mentioned above, benefit from the total exemption from corporate tax during the first five (5) financial years granted to companies located in these zones

Alternative minimum tax: The amount of corporation tax may not be less than a minimum contribution of 0.25% of annual turnover (excluding VAT) and 0.15% for transactions carried out by commercial enterprises for the sale of petroleum products, gas, butter, oil, sugar, flour, water, electricity and medicines. applicable for fiscal years beginning on or after January 1, 2023. This minimum tax is based on turnover, interest income, subsidies, bonuses or donations received.

Taxation of dividends: Dividends received by foreign shareholders are currently not taxed when distributed by companies based in industrial acceleration zones, and taxed at 15% otherwise. Taxation will be gradually applied to companies based in industrial acceleration zones and the rate will decrease, for all companies, to reach 10% in 2026.

Capital gains: Taxed as regular income.

Losses: Tax losses may be carried forward over four years from the end of the accounting period in deficit. However, the depreciation portion of a loss may be carried forward indefinitely.

Foreign tax relief: Foreign tax credits are available if so provided in an applicable tax treaty.

Participation exemption: n/a

Holding-company regime: n/a

Tax-based incentives: See above under “significant local taxes”.

Group relief/fiscal unity: n/a

Small company/alternative tax regimes: n/a

Corporate taxation: compliance

Tax year: Accounting period. Cannot exceed 12 months.

Consolidated returns: n/a

Filing and payment: Tax year: Accounting period (cannot exceed 12 months), the annual tax return must be filed within 3 months of the closing date.

Penalties: Penalty for late presentation of CIT return: – 5% if the delay doesn’t exceed 30 days; – 15% after 30 days; – 20% in the event of automatic taxation for failure to file, incomplete or insufficient declaration. Sanction for late payment of CIT: – penalty of 10% (5% if the payment is done within 30 days) + interest of 5% + 0.5% per additional month

Rulings: n/a

Taxation of individuals

Annual income bracket/MAD

Rate %

Annual income bracket/MAD	Rate %
0	30 000,00	Exempted
30 001,00	50 000,00	10%
50 001,00	60 000,00	20%
60 001,00	80 000,00	30%
80 001,00	180 000,00	34%
180 001,00	plus	38%

Residence: Tax residence is defined according to Double Tax Treaties.

Basis: Salary minus deductions and non taxable allowances.

Taxable income: Taxable income deriving from salaries, property income, etc.

Capital gains: Their taxation is either 15% or 20%. It depends on the nature (income or capital gain) and the source (Morocco or abroad) of the revenues.

Deductions and allowances: Deduction of professional fees (calculation provided by law), interests on loan on primary residence, transportation (500 or 750 MAD depending on the location), representation allowance (for Directors), deduction on property income, etc.

Foreign tax relief: Application of the content of Double Tax Treaties

Taxation of individuals: compliance

Tax year: Calendar year.

Filing and payment: Deposit and payment: The tax return must be filed – before March 1st of each year, for holders of income other than professional income; – before 1 May of each year, for holders of professional income determined under the net income or simplified net income regime Joint declaration is not allowed; Each individual must file a separate return.

Penalties: Interest and penalties apply for late filing, failure to file or filing an incorrect return.

Rulings: n/a

Withholding taxes

Usually 10% for services, interests, rentals, paid to a foreign company. However, the Double Tax Treaty, if any, states the rate of withholding tax and which cases it’s applicable.

Branch remittance tax: n/a

Anti-avoidance legislation

Transfer pricing: Expected Decree for the application of the Law that states Master File and Local File are mandatory for companies with sales or total assets exceeding 50 MMAD. However, in case of tax audit, it’s mandatory to explain the transfer pricing method in force.

Interest restriction: Limitation on the deductibility of interests on shareholder’s current account set annually by Ministerial Decree. Moreover, share capital should be fully released and the cap for calculation of the interests in the amount of share capital.

Controlled foreign companies: As the tax rules in Morocco, regarding the corporate tax, are based on the territoriality principle, the income of the foreign company is not taxed under the local company taxable income, regardless of the type of ownership (controlled or not controlled entity). However, Moroccan companies based in mainland can only invest abroad with the authorization of the Foreign Exchange Office.

Hybrid mismatches: Tax rules in Morocco do not include rules to tackle or to neutralize the hybrid mismatches impacts

Disclosure requirements: Country-by-country report currently limited to a few cases, to be extended.

Exit taxes: There’s no specific “exit tax”: before leaving the country, the company or the individual shall be compliant with all standard taxes.

General anti-avoidance rule: Arm’s length principal + an article of the General Tax Code deals with taxpayer abuse of rights.

Digital services tax and Other significant anti-avoidance legislation: Digital services taxes has been introduced by 2024 Finance Law, Decree of application to come.

Value-added tax/Goods and services tax

Type of tax: In general, VAT arises when a service is performed, goods are supplied or, in the case of imports, when customs clearance documents are filed with customs. Exports are exempt from VAT.

Standard rate: 20% is the standard VAT rate applicable to transactions other than those subject to the reduced VAT rates mentioned above. As of 2026, only two rates will remain: 10% and 20%.

Reduced rates: The applicable VAT rates are as follows: • 7% rate applies for some goods of general consumption, water, renting out of water and electricity meters • 10% rate applies to banks, credit transactions and exchange commissions except leasing, the supply of catering services and the activities of some professions(a)(lawyers, interpreters) • 14% rate applies for transportation transactions, electrical energy, etc. •

Registration: VAT registration is done at the same time as the incorporation of the Company.

Filing and payment: VAT filling is done: – on a monthly basis if previous year’s taxable sales are equal to or exceed 1 million MAD; or for any taxable person who doesn’t have a headquarter in Morocco . – on a quarterly basis otherwise. The payment is done before the end of the following month.

Social security contributions

6.74%	Employee
21.09%	Employer

Self-employed

Self employed people can contribute to Social Security system for health care and retirement, under conditions. 12.89% capped at a monthly revenue of 6.000 (six thousand) MAD + 4.52%.

Other taxes

Capital duty: n/a

Immovable property taxes: n/a

Transfer tax: n/a

Stamp duty: Stamp duties (droits de timbre) apply to acts and documents which are established for the title or justification of a right, of an obligation or a discharge and, in general, to record a legal fact or legal relationship. They’re applicable to sales in cash (0.25%)

Net wealth/worth tax: n/a

Inheritance/gift taxes: n/a

Other: Tax Registration is a formality to which are subject deeds and other agreements. It gives rise to the levy of a tax called “registration fee”. Registration is meant to give a definite date to private deeds and ensure recordkeeping. Social solidarity contribution :

The Social solidarity contribution payable by companies whose net taxable profit is equal to or greater than 1 million MAD (with some exclusions) :

Amount of profit or income subject to the contribution (in dirhams) contribution rate% From 1 million to less than 5 million 1,5 From 5 million to less than 10 million 2,5 From 10 million to less than 40 million 3,5 From 40 million and more 5 Business tax

A business tax is levied on individuals and enterprises that usually carry out business in Morocco. The business tax is applied on the annual rental value of business premises (rented or owned) and of fixed assets, capped at MAD 50 million net of VAT. The tax rates range from 10 % to 30% with exemption for the five first years of activity.

Waste Tax Waste tax applies to buildings and constructions of any kind, to equipment, tools and any means of production subject to the business tax.

The rates of the CST are : 10.5% of the rental value for properties located within the perimeter of urban municipalities and delimited centers; 6.5% of the rental value for property located in the outlying areas of urban municipalities. Customs duties All goods and services may be imported. Goods deemed to have a negative impact on national production, however, may require an import license. Morocco has concluded free trade agreements with the EU, USA, Turkey, UAE, etc; Other Withholding taxes Interest: interest paid on a loan from a non-resident is subject to a 10% withholding tax, unless the rate is reduced under a tax treaty.

A loan on foreign currencies granted for 10 years or more is exempt from withholding tax. Royalties: Royalties paid to a non-resident are subject to a 10% withholding tax, unless the rate is reduced under a tax treaty.

REPATRIATION OF PROFITS AND TRANSFER PRICING In addition to paying interest and dividends, the payment of management fees, service fees and royalties can be seen by Tax Inspectors as methods of repatriating profits to the non-resident associates, controllers and owners of Moroccan entities. In these circumstances, the payments made by the Moroccan resident to the non-resident associate must reflect the market value of the goods and/or services to the Moroccan company. That is, all payments must be calculated with reference to arm’s length market rates.

Tax treaties

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