Tax

Which taxes does an entrepreneur have to pay in Morocco? How much?

Taxation laws are enacted by parliament and then consolidated into the General Tax Code (CGI). Notes, instructions and circulars interpreting the tax laws are published by the tax authorities in bulletins, most of which are available to the public. These bulletins provide guidance for understanding the interpretations and practices of the tax authorities. The Directorate General of Taxes (DGI) division of the Ministry of Economy and Finance handles the issuance, collection and control of taxes. It also monitors complaints and disputes from taxpayers. Local tax is governed by the Regional Directorate of Taxes (DRI) in each of the major economic regions of the Kingdom.

The taxes commonly applicable for entrepreneurs are

Corporate Income Tax (CIT) – 15%, 30% or 37%

Also known as a business tax, is a tax imposed on all profits or income relating to goods or property owned by companies resident in Morocco. For non-resident Moroccan companies the tax is subject to those activities they perform or profit-making transactions they carry out in Morocco. The CIT rate in Morocco is 30%.

The corporate tax rate is 37% for banks and insurance companies and 15% for companies with an annual turnover not exceeding MAD 3 million.
The taxable income is determined on the basis of financial statements obtained according to the generally accept Moroccan principles, with some adjustments relating to fiscal law.
Entities are always subjected to a legal minimum tax (cotisation minimale : CM) of 1500 MAD or 0.5% of the annual turnover. The CM is based on turnover, income from interest, subsidies, bonuses or donations received.

Capital Gains Tax

Capital gains from capital are taxed e.g. building held for business, factory or office and shares of companies. E.g. profits on the sale of property are taxable at 20% of any profit, but with a minimum tax of 3% of the sale price.

Withholding tax

The withholding tax rate is 10% maximum on the distribution of dividends to non-resident shareholders and after tax profits to the branch’s head office.

Value Added Tax (VAT) – 7%, 10%, 14%, 20%

VAT is an indirect tax on the consumption of goods and services or on imports, when clearance documents are filed with customs. Exports are exempted from VAT. The current standard VAT rate in Morocco is 20%. Under Article 99 of the Moroccan Tax Code, lower rates apply to specific business activities, including the following:

For goods of general consumption such as water and electricity are subject to a rate of 7%.
Bank and credit transactions and exchange commission’s except for leasing, the supply of catering services and the activities of some profession have a VAT rate of 10%.
A 14% VAT rate applies for transportation transactions
The standard VAT rate for all the other goods and services that were not mentioned above is 20%

Income Tax

Employees’ Tax refers to the tax required to be deducted by an employer from an employee’s remuneration. Each month, a Moroccan employer has to withhold and pay income tax to the Treasury on every payment to the employee.

Property Tax

Property tax is a tax that you pay over the property owned by the company. Property tax is assessed on the rental value of the property. The general property tax rate is 10% of the assessed rental value, as determined by the local tax authorities. If the property is used as a primal residence, only 25% of the assessed rental property value is subject to tax. Properties occupied as a main or second residence are taxed at progressive rates.

Branch Tax

A 10% branch remittance tax is imposed on profits remitted to the head office.

Registration Fees

There is a registration fee imposed of 0.5% on the on the forming or increasing of company capital. This rate is reduced to 0.25 percent for deeds of partnership or capital increase of investment banks and companies the main purpose of which is either stocks and shares management or application for other companies on joint account.

How do I pay for my tax?

Corporate Income Tax (CIT)

Corporate tax is payable in 4 equal installments, based on the prior year’s assessment. The actual amount payable is adjusted in the 3 months following the end of the accounting period. The tax form should be filled online.

Value Added Tax (VAT)

For information on how to pay the VAT please refer to the ‘time of supply’ section of this page.

Starting or running a business?

Tax