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Morocco

Financial Year – 1 January – 31 December
Currency – MAD

Corporate Tax Summary

Residence – All Moroccan companies are submitted to the corporate tax fixed each year follong the Tax Law.

The definition of ‘corporation’ covers limited liability companies, limited partnerships by shares, general and limited partnerships in which at least one partner is a corporate entity, civil companies, branches of foreign corporations, public sector companies having profit-oriented activity and joint ventures having business-oriented activity. General partnerships and limited partnerships in which all partners are individuals may elect to be taxed under the corporate tax regime. The same applies to joint ventures in which all parties are individuals.

From 2020, the corporate tax is alculated by ranges:

  • Less or equal to 300 000 : 10%
  • from 300 001 to 1 000 000 : 20%
  • Higher than 1 000 000 : 31%

The rate of the scale of 31% is however reduced to 28% for companies exercising an industrial activity, excluding those whose net profit is equal to or greater than 100,000,000 dirhams,

A higher CIT rate of 37% applies to leasing companies and credit institutions.

Foreign contractors carrying out engineering, construction or assembly projects relating to industrial or technical installations may opt to be taxed at a rate of 8% calculated on the total contract price net of VAT and similar taxes.

Companies are always subjected to a legal minimum tax (cotisation minimale (CM)) of MAD 3.000 or 0.5% of the annual turnover. The CM is 0,6% if the 2 previous years current result before amortization is negative. It is based on turnover, income from interest, subsidies, bonuses or donations received. The CM is not payable by companies during their first 36 months of operation.

Basis of Taxation – The Corporate tax is calculated on the tax net result which is the accounting net result corrected by the tax reintegrations and deductions and the losses carry forward.

Tax losses may be carried forward for a period of four years from the end of the lossmaking accounting period. However, the portion of a loss that relates to depreciation may be carried forward indefinitely. Losses may not be carried back.

Dividends received by corporate shareholders from taxable Moroccan-resident entities must be included in business profits of the recipient company but the dividends are 100% deductible in the computation of taxable income.

Dividends paid to a non-resident are subject to a 15% withholding tax unless the rate is reduced under an applicable tax treaty. Interest on loans obtained from a non-resident is subject to a 10% withholding tax. Royalties paid to non-residents are subject to a 10% withholding tax unless the rate is reduced under an applicable tax treaty.

Reference
Corporate Income Tax Rate (%) Calculated by ranges
Branch Tax Rate (%) No specifiteies regarding Branches
Withholding Tax Rate:
Dividends – Franked From 5% to 15% depending the tax agreement with the sharholders country
Dividends – Unfranked From 5% to 15% depending the tax agreement with the sharholders country
Dividends – Conduit Foreign Income From 5% to 15% depending the tax agreement with the sharholders country
Interest From 5% to 15% depending the tax agreement with the sharholders country
Royalties from Intellectual Property From 5% to 15% depending the tax agreement with the sharholders country
Fund Payments from Managed Investment Trusts From 5% to 15% depending the tax agreement with the sharholders country
Branch Remittance Tax From 5% to 15% depending the tax agreement with the sharholders country
Net Operating Losses (Years)
Carry back
Carry forward 4 years

Individual Tax Summary

Residence – All the revenues of a physical person which tax residency is in Morocco are submitted to the revenu taxes: this tax includes the tax on salary which is a witholding tax

Basis of Taxation – Individuals, regardless of nationality or activity, who have their habitual residence in Morocco are subject to a personal income tax (impôt sur le revenue or IR) on their worldwide income on a progressive scale between 10% and 38%.

Individuals who do not have their habitual residence in Morocco are subject to tax only on Moroccan-source income. Habitual residence status is established by reference to one of the following:

  1. place of permanent abode
  2. centre of economic interest
  3. duration of stay in the country exceeding

183 days within any period of 365 days.

The issue of double taxation is partially addressed by tax treaties or unilateral relief in the form of tax credit.

All compensation received by an individual is taxable, including salaries and wages, allowances, pension annuities, and all other employment benefits, investment income, property income and income derived from the carrying out of a business or profession.

Capital gains derived from the disposal of immovable property are generally subject to tax as part of the personal income of the individual, i.e. 20%.

Filing and payment: the tax return must be filed by 28 February for non-professional revenues and 30 April for professional revenues of each year in the place where the taxpayer has his/her habitual residence or main business.

Resident individuals are assessed to tax on taxable income from January 2010 according to the following scales:

Income MAD Payable Tax
0 – 30,000 Nil
30,001 – 50,000 10%
50,001 – 60,000 20%
60,001 – 80,000 30%
80,001 – 180,000 34%
Over 180,000 38%

A range of rebates are available to Moroccan resident individual taxpayers.

Employers must retain and pay any income tax due on the salaries paid to their employees the previous month within the first ten days of each month. Individuals who receive incomes from non-wage sources must file a tax declaration every year on or before 28 February.

Rental income is subject to monthly withholding tax by the tenant or to an annual declaration by the lessor before February 28 at the rate of 10% if the annual rent is less than 120,000.00 or 15% beyond.

Filing Status

  • The tax on salary is a witholding tax filed by the employer
  •  

    The other revenues are filed yearly by the contribuable

Personal Income Tax Rates

Taxable Income Tax Payable – Residents Tax Payable – Non Residents
0 to 30.000 MAD 0
30.001 to 50.000 MAD 10
50.001 to 60.000 MAD 20
60.001 to 80.000 MAD 30% 30%
80.001 to 180.000 MAD 34
Up to 180.000 MAD 38

Goods and Services Tax (GST)

Rate 20%
Taxable Transactions The Value Added Tax (VAT) is a non-cumulative tax levied at each stage of the production and distribution cycle. Thus, suppliers of goods and services must add VAT to their net prices. Where the purchaser is also liable for VAT, input VAT may be offset against output VAT. The standard VAT rate is 20% and applies to all suppliers of goods and services, except those taxed at other rates or those who are exempt. A reduced rate of 10% applies to specific items such as banking and credit services, leasing, gas, water and electricity.
Two types of exemptions from VAT are provided. The first is an exemption with credit, equivalent to the zero tax concept, which applies to exports, agricultural materials and equipment, and fishing equipment. The second is an exemption without credit – ie the seller receives no credit for input VAT paid. This exemption applies to basic foodstuffs, newspapers and international transport services.
Registration Registration to the tax administration for the filing and payment
Filing and Payment Filing and Payement online

Other Taxes Payable

Tax Reference
Payroll Tax Taxe on Salary
Income MAD Tax Payable
0 – 30,000 Nil
30,001 – 50,000 10%
50,001 – 60,000 20%
60,001 – 80,000 30%
80,001 – 180,000 34%
Over 180,000 38%
Corporate Tax 0,25% on cash payment
Land Tax PROPERTY TAX
Property taxes are paid annually. The first five years owners have full exoneration (Property agencies are NOT included). After 5 years the tax is based on the property’s annual rental value. This is done with a graduated tax table:

  • < 3000 dh 0%
  • 3.001 – 6.000 dh 10%
  • 6.001 – 12.000 dh 16%
  • 12.0o1 – 24.000 dh 20%
  • 24.001 – 36.000 dh 24%
  • 36.001 – 60.000 dh 28%
  • > 60,000 dh 30%

There is a 75% discount if the home is your permanent or vacation home residence.

PROPERTY RENTAL TAX: Investors pay 13.50% on the rental value of the property.

GARBAGE COLLECTION TAX (Fiscalite des collectivites locales)
There is a 5 year exoneration from the garbage collection tax. Tax is levied at 10% of the property’s annual rental value.

CAPITAL GAINS TAX
Capital gains tax is 20% of profit with a minimum of 3% of the sale price. TPI is based on the sale price less the purchase price.

A business tax or “taxe professionnelle” is levied on individuals and enterprises that habitually carry out business in Morocco. The business tax is applied on the annual rental value of business premises (rented or owned) 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.
Owners of real estate are subject to urban property tax on the rental value of the property. The same applies to owners of machines and appliances that are integral parts of the establishment producing goods or services.

All goods and services may be imported. Goods deemed to have a negative impact on national production, however, may require an import licence. Products from the EU are fully exempted from March 2012. Cars, household items and also semi-finished products for local industry are reviewed. The rates fall for products brought from the outside world. Some materials and products, however, are exempted, especially those imported under the investment charter, imported under customs economic systems and those using renewable energies. Value added tax is also payable on goods imported into Morocco.

Last updated: 23.05.2020