flag Morocco Morocco: Tax System

In this page: Corporate Taxes | Accounting Rules | Consumption Taxes | Individual Taxes | Double Taxation Treaties | Sources of Fiscal Information

 

Corporate Taxes

Tax Base For Resident and Foreign Companies
Moroccan residency status applies if a company is incorporated in Morocco or its place of effective management is in Morocco.
 

Tax Rate

Corporate income tax rates For fiscal years 2024 to 2026, the evolution of the CIT rates for companies in Morocco is as follows:
Companies with a net taxable income of MAD 300,000 or less   - 2024: 15%
  - 2025: 17.5%
  - 2026: 20%
Net taxable income between MAD 300,001 and MAD 1 million   - 2024: 20%
  - 2025: 20%
  - 2026: 20%
Net taxable income between MAD 1 million and MAD 100 million   - 2024: 25.5%
  - 2025: 22.75%
  - 2026: 20%
Net taxable income of MAD 100 million or more   - 2024: 33%
  - 2025: 34%
  - 2026: 35%
Companies carrying out industrial activities
From MAD 0 to 1 million
  • 2024: 23%
  • 2025: 21.5%
  • 2026: 20%
  • Above MAD 1 million
  • 2024: 33%
  • 2025: 34%
  • 2026: 35%
  • Minimum contribution 0.25%
    0.15% for operations carried out by commercial companies for sales of petroleum products, gas, butter, oil, sugar, flour, water, electricity, and medicines
    Hotel, sports, mining, export and agricultural companies, service outsourcing companies, craft enterprises, private educational or vocational training establishments, training establishments and property rental companies, university campuses and residences
    Net taxable income of MAD 300,000 or less   - 2024: 15%
      - 2025: 17.5%
      - 2026: 20%
    Net taxable income between MAD 300,001 and MAD 1 million   - 2024: 20%
      - 2025: 20%
      - 2026: 20%
    Net taxable income of MAD 100 million or more   - 2024: 27.5%
      - 2025: 31.5%
      - 2026: 35%
    Social solidarity contribution on the profits of companies with net profit equal to or greater than MAD 1 million (calculated on the net taxable profit of the previous fiscal year)
    • 1.5% for companies with net profit of MAD 1 million to less than 5 million;
    • 2.5% for companies with net profit of MAD 5 million to less than 10 million;
    • 3.5% for companies with net profit of MAD 10 million to less than 40 million; and
    • 5.0% for companies with net profit of MAD 40 million or more
    WHT rate applicable to income from shares, units and similar income 13.75% in 2023
    Special rates

    20% for:

    • Companies with "CFC" status
    • Companies operating in Industrial Acceleration Zones (ZAI)
    • Companies created as from January 1st, 2023, and which commit to the framework of an agreement signed with the state to invest MAD 1.5 billion in tangible assets and maintain it for 10 years (with the exception of public establishments and companies and their subsidiaries)
    Companies with Casablanca FC status Exempt for the first five years following the date of their incorporation
     
    Tax Rate For Foreign Companies
    Moroccan tax applies territorially. Companies, whether established in Morocco or not, are subject to corporate income tax on all profits or income derived from property they own, activities they conduct, and profit-making transactions they carry out in Morocco, even if these activities are occasional. Foreign companies are liable on Moroccan-sourced income at the same rates as local companies (unless preferential treatment is granted under foreign investment schemes).
    A branch tax of 15% applies to the net income transferred by the Moroccan branch to foreign entities.
    Capital Gains Taxation
    Capital gains are treated as non-current income and taxed at the normal corporate tax rate.
    Non-resident companies are exempt from capital gains derived from the sale of stocks listed on the Casablanca stock exchange, excluding the shares of real estate entities.
    For the years 2023, 2024 and 2025, companies will benefit from a 70% deduction on the net capital gain resulting from the sale of fixed assets, excluding land and buildings.
    Main Allowable Deductions and Tax Credits
    Expenses incurred in connection with business activities are generally deductible unless specifically excluded. Start-up expenses shall be capitalised and depreciated for tax purposes over a five-year period. Interest on loans granted by direct shareholders is deductible if the capital is fully paid in, limited to the share capital equity and the interest rate provided annually by the Ministry of Finance.

    Charitable contributions made by companies are deductible only if they are granted to foundations and societies explicitly provided by law. In the case of contributions made to the community enterprise, the deduction is capped at 0.2% of the turnover.

    Bad debts that are definitively non-recoverable are treated as deductible losses. Taxes are generally deductible (except for corporate income tax).

    Tax losses can be carried forward for up to four years from the end of the accounting period in which the loss occurred. However, the portion of a loss attributable to depreciation can be carried forward indefinitely. The carryback of losses is not permitted. Foreign tax relief is provided for foreign-sourced income.

    Morocco offers tax incentives in the form of tax exemption or taxation at more advantageous rates for local and foreign investors. For instance, incentives include an exemption from business tax for the first five years for newly incorporated companies and a corporate income tax exemption for companies operating tourist establishments for the first five years, subject to certain conditions. Several acceleration zones in cities like Fes, Kenitra, Layoune, Nador, Rabat, and Tangier offer authorized companies a business tax exemption for the first 15 years and a corporate income tax exemption for the first five years. Companies with "Casablanca Finance City" status are entitled to a corporate income tax exemption for five years from the start of the tax year in which the status was obtained. Additionally, tax-neutral treatment may be available for corporate income tax purposes for the transfer of investment goods between member companies of a restructuring group. Companies that qualify as OPCIs are exempt from tax on rental income from buildings constructed for professional use, as well as dividends and interest received.

    Other Corporate Taxes
    Registration duties between 1% to 6% are due on all written or verbal conventions, such as property transfer of real estate, shares, or rights; company set-up; equity increase; and goodwill transfer (6%). A flat rate of MAD 200 is also applicable to specific operations and conventions. The acquisition of real property is subject to a 1% real estate tax.

    Legal entities conducting business activities in Morocco are subject to a business tax based on the rental value of buildings, premises, and other assets used for the business. This tax is levied at rates of 10%, 20%, or 30% of the rental value, depending on the nature of the entity's business.

    Additionally, a municipal tax is imposed at a rate of 10.5% on the rental value of real estate assets located within urban districts, and at a rate of 6.5% on the rental value of real estate assets in the peripheral zones of urban districts.

    A Payroll tax (called professional training tax) is imposed on the gross monthly remuneration of employees that are subject to social security contributions, at a rate of 1.6%. Morocco's mandatory social security regime is managed by the CNSS (Caisse Nationale de Sécurité Sociale). Employers' contributions are as follows: family allocation 6.40%; social allocation 8.60% (with a computation base capped at MAD 6,000); professional tax 1.60%; mandatory medical care 4.11%.

    Other Domestic Resources
    General Tax Administration
     

    Country Comparison For Corporate Taxation

      Morocco Middle East & North Africa United States Germany
    Number of Payments of Taxes per Year 6.0 20.8 10.6 9.0
    Time Taken For Administrative Formalities (Hours) 155.0 204.0 175.0 218.0
    Total Share of Taxes (% of Profit) 45.8 32.1 36.6 48.8

    Source: The World Bank - Doing Business, Latest data available.

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    Accounting Rules

     

    Accounting System

    Accounting Standards
    All banks and similar financial institutions need to file using IFRS Standards. All companies listed on the Casablanca Stock Exchange other than banks and similar financial institutions are required to choose between IFRSs and Moroccan GAAP.
    Accounting Regulation Bodies
    National Council of Accounting (Link in French)
    Accounting Law
    Companies Law of 1999, Law 15-89 1993 on the regulation of the profession of Chartered Accountants
    Difference Between National and International Standards (IAS/IFRS)
    Moroccan GAAP, which are significantly different from IFRS Standards, are no longer required for domestic or foreign public companies as the only available financial reporting framework. In fact, banks and similar financial institutions are required to file using IFRS standards. All companies listed on the Casablanca Stock Exchange other than banks and similar financial institutions are required to choose between IFRSs and Moroccan GAAP.
     

    Accounting Practices

    Tax Year
    The calendar year normally is the fiscal year, although a company may opt for a different fiscal year.
    Accounting Reports
    Moroccan Institute of Chartered Accountants aims to converge the Moroccan Standards on Auditing with International Standards on Auditing (ISA) for statutory audits by December 2017.
    Publication Requirements
    The balance sheet describes separately the asset and liabilities items of the business.
    The income and expense account summarizes the incomes and expenses of the financial year without considering their date of cashing or payment.
    The management balances report describes the formation of the net income and that of self-financing.
    The funds flow statement highlights the financial growth of the company during the financial year by describing the resources provided and jobs provided from it.
    The additional details report supplements and comments on information provided by the balance sheet, the income and expense account, the management balances report and the funds flow statement.

    The account should be certified annually.

     

    Accountancy Profession

    Accountants
    Generally auditors, chartered accountants and public accountants are distinguished.
    The government auditors necessarily belong to the public accountants corporation.
    The chartered accountants play the role of financial, accounting, legal and tax consultant in companies.
    Audit relates more to an internal management audit of the company.
    Professional Accountancy Bodies
    Moroccan Institute of Chartered Accountants
    Moroccan Institute of Internal Auditors
    Member of the International Federation of Accountants (IFAC)
    Morocco is a member of the International Federation of Accountants (IFAC).
     
     

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    Consumption Taxes

    Nature of the Tax
    VAT - Value-Added Tax (Taxe sur la Valeur Ajoutée - TVA)
    Standard Rate
    20%
    Reduced Tax Rate
    A reduced rate of 10% applies to petroleum products; banking transactions; hotel operations; restaurant operations; sales and delivery operations relating to art objects; edible fluid oils; solar water heaters and photovoltaic panels, sales and deliveries of water intended for public distribution networks, sanitation services provided by sanitation organizations and water meter rental operations not intended for domestic use, fishing gear and nets intended for maritime fishing professionals, economy cars and all products and materials used in their manufacture, as well as related assembly services.

    The VAT rate for transport, butter, services rendered by any direct selling agent or insurance broker in respect of contracts brought by it to an insurance business, and electricity is 14%.

    A reduced rate of 7% applies to water; rental of water and electricity meters; pharmaceutical products and non-recoverable packaging of pharmaceutical products.

    Zero-rated items include exported goods and services, goods placed under customs suspensive regime, fertilizers, machinery for exclusively agricultural use, investment goods recorded as fixed assets, acquired by taxable persons, for 36 months as from the start of the activity, excluding vehicles acquired by car rental agencies, pharmaceutical products, sales and deliveries of water for domestic use, sanitation services provided by sanitation organizations and water meter rental for the same use.

    Per the changes of the 2024 Finance Law, the 7% and 14% rates have been phased out as follows:
      - Downward adjustments – no changes for 2023, 2024, 2025, 2026
      - Sale of electricity generated from renewable energy sources – 14% (2023), 12% (2024), 10% (2025), 10% (2026)
      - Services provided to insurance companies by direct marketers or insurance brokers (contracts brought to the company by the direct marketer or broker) – 14% (2023), 12% (2024), 10% (2025), 10% (2026)
      - Urban and road passenger and freight transport operations – 14% (2023), 13% (2024), 12% (2025), 10% (2026)
      - Upward adjustments – no changes for 2023, 2024, 2025, 2026
      - Refined or agglomerated sugar – 7% (2023), 8% (2024), 9% (2025), 10% (2026)
      - Rental of electricity meters – 7% (2023), 11% (2024), 15% (2025), 20% (2026)
      - Electric power – 14% (2023), 16% (2024), 18% (2025), 20% (2026)
      - Passenger and freight transport (non-urban and non-road) – 14% (2023), 16% (2024), 18% (2025), 20% (2026).

    Exclusion From Taxation
    Exempt items include sales, other than for consumption on the spot, of goods including fresh, frozen, whole or cut fish products; sales of recovered metals and water pumps that use solar energy or any other renewable energy used in the agricultural sector; services provided by insurance and reinsurance companies; royalties and license fees included in the taxable amount for import VAT, up to the amount of VAT paid on importation in respect of these royalties and license fees, school supplies and the products and materials used in their composition.
    Method of Calculation, Declaration and Settlement
    VAT is imposed on all industrial, commercial, and craft activities, services rendered in Morocco, and import transactions. All persons subject to VAT must register by making a "declaration of existence" within 30 days of commencing operations. VAT returns are generally filed monthly. Nonresident taxpayers engaging in taxable transactions in Morocco must appoint a fiscal representative in the country. However, under the reverse charge mechanism, if a nonresident taxpayer has not appointed a fiscal representative, the Moroccan customer must declare and account for the VAT on the transaction in their own VAT return.
    Other Consumption Taxes
    Excise duties are levied on several products, including alcoholic beverages, energy drinks, tobacco, sugar, oil products, lubricants, etc.
    Plane tickets for international flights departing from Moroccan airports are taxed at MAD 100 for Economy class and MAD 400 for Business and First class.

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    Individual Taxes

    Tax Base For Residents and Non-Residents
    An individual is considered to be resident in Morocco if: he/she has a permanent home in the country; he/she has the centre of economic interest or carries on professional activities in Morocco; or stays in the country for more than 183 days within any period of 365 days.
     

    Tax Rate

    Progressive income tax From 0 to 38%
    Up to MAD 30,000 0%
    From MAD 30,001 to 50,000 10%
    From MAD 50,001 to 60,000 20%
    From MAD 60,001 to 80,000 30%
    From MAD 80,001 to 180,000 34%
    Above MAD 180,000 38%
     
    Allowable Deductions and Tax Credits
    The deductions from gross salary concern mainly social security contributions, retirement contributions, and a lump-sum deduction equal to 25% of the gross salary for incomes not exceeding MAD 78,000 (with a ceiling of MAD 35,000 per year).
    The deduction applicable to pensions and life annuities is set at 70% of the gross taxable amount not exceeding MAD 168,000.

    Charitable contributions are deductible if granted to organisms and societies expressly provided by the tax law. Loan interest related to the acquisition of a main house is tax deductible, up to a limit of 10% of the taxable global revenue.

    Certain indemnities such as dismissal indemnity, compensation for voluntary departure, and compensation for damages awarded in the event of dismissal are exempt from taxation up to a maximum limit of MAD 1 million. However, if an individual receives multiple indemnities, the combined total amount of such indemnities exempted from income tax cannot surpass the aforementioned limit of 1 million.

    Professional expenses incurred in the operation of the business are generally deductible unless specifically excluded. The cap on professional expenses deductible from gross annual taxable income has been raised from MAD 30,000 to MAD 35,000 for individuals whose gross annual taxable income does not exceed MAD 78,000. For those with a gross annual taxable income exceeding MAD 78,000, the deduction rate is set at 25%, up to a limit of MAD 35,000. Additionally, the deduction for pensions and life annuities has been increased from 60% to 70% on the gross taxable amount not exceeding MAD 168,000.

    Special Expatriate Tax Regime
    Individuals with their main homes in Morocco are taxed on the totality of their incomes. Non-resident individuals are taxed only on Moroccan-sourced income.
    There are no special regimes for expatriates (unless a double taxation treaty applies).
    Capital Tax Rate
    Capital gains from the sale of property are generally taxed at 20% as part of ordinary income, at a minimum of 3% of the selling price. The sale of a resident company's share is taxed at 10%.
    Capital gains derived from the disposal of immovable property generally are subject to a 20% tax, the same as those derived from the disposal of shares. Capital gains derived from the disposal of a residence used as principal residence for at least six years are exempt from taxation.

    Rental income is subject to individual income tax (based on the gross amount) at the following rates: 10% for annual gross revenues below MAD 120,000, and 15% for annual gross revenues equal to or exceeding MAD 120,000.

    Municipal tax is levied at a rate of 10.5% of the rental value of real estate assets situated within urban districts, and 6.5% of the rental value of real estate assets in peripheral zones of urban districts.

    Employees have to contribute to the Caisse Nationale de Sécurité Sociale (CNSS) fund, as follows: social allocation 4.48%; mandatory medical care 2.26%.

    Morocco does not levy any net wealth tax, net worth tax, inheritance tax, or gift tax.

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    Double Taxation Treaties

    Countries With Whom a Double Taxation Treaty Have Been Signed
    List of double taxation treaties signed by Morocco
    Withholding Taxes
    Dividends paid to a resident company are not subject to withholding tax. A 12.5% withholding tax rate applies to dividends paid to a resident individual, while the rate for a nonresident company or individual is 10%.
    Interest paid to a resident company is subject to a 20% withholding tax. A 30% withholding tax applies to interest paid to a resident individual. Interest paid on a loan from a nonresident is subject to a 10% withholding tax, unless reduced by an applicable tax treaty. Interest on loans granted by a nonresident for 10 years or more is exempt from withholding tax.
    Royalties paid to a resident are exempt from withholding tax, while royalties paid to a nonresident are subject to a 10% withholding tax.
    The rates may vary according to specific tax treaties.

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    Latest Update: June 2024