B. Taxes on corporate income and gains
Corporate income tax. The following companies are subject to corporate income tax:
• Resident companies (those incorporated in Morocco)
• Nonresident companies deriving taxable income from activities carried out in Morocco
• Nonresident companies deriving capital gains from sales of unlisted shares and bonds in Morocco (unless a double tax treaty between Morocco and the residence country of the beneficiary provides otherwise)
• Branches of foreign companies carrying on business activities independent of those performed by their head office
In general, only Moroccan-source income is subject to tax unless a provision of a double tax treaty provides otherwise.
Tax rates. The 2023 Finance Law introduced a phased reform of corporate income tax rates over a period of four years with the objective of converging toward unified tax rates applicable from 2026 onward, replacing the proportional tax system and the multiplicity of derogatory regimes.
The unified standard target rates are the following:
• 20% applicable to all companies with net taxable profit of less than MAD100 million.
• 35% applicable to companies with net taxable profit of MAD100 million or more. The 35% rate is reduced to 20% if the net taxable profit for the companies remains under MAD100 million during three consecutive fiscal years. The 2024 Finance Law amended this provision by restricting the application of the 35% corporate income tax rate to the fiscal year in which the aforementioned threshold is reached or exceeded, with the possibility of applying the 20% rate for subsequent fiscal years if such threshold is exceeded as the result of capital gains from the sale of fixed assets.
The following are the applicable proportional corporate income tax rates for the 2024 fiscal year.
(a) For companies carrying out industrial activities with a net profit of less than MAD100 million, the rate of 25.5% is reduced to 23%.
(b) Newly registered companies that undertake to invest more than MAD1.5 billion within a five-year period are taxable at a maximum of 20% even if their taxable income exceeds MAD100 million.
The above corporate income tax rates will be increased or decreased each year until achieving the target rates in 2026.
Banks, financial institutions, and insurance companies are subject to tax at a rate of 38.5%. This rate will be increased by 0.75% per year to reach 40% in 2026.
The minimum tax equals the greater of the minimum fixed amount of MAD3,000 and 0.25% of the total of the following items:
• Turnover from sales of delivered goods and services rendered
• Other operating income
• Financial income (excluding financial reversals and transfers of financial expenses; a financial reversal refers to an accounting record reflecting the decrease or cancellation of the financial provision [generally related to foreign-exchange risk] already recorded in the previous fiscal year, while a transfer of financial expenses refers, for example, to an accounting record to allocate expenses over multiple years)
• Subsidies received from the state and third parties
The rate of minimum tax is reduced to 0.15% for sales of petroleum goods, gasoline, butter, oil, sugar, flour, water, electricity and medicine. The minimum tax applies if it exceeds the corporate income tax resulting from the application of the proportional rates or if the company incurs a loss. New companies are exempt from minimum tax for 36 months after the commencement of business activities.
Nonresident contractors may elect an optional method of taxation for construction or assembly work or for work on industrial or technical installations. Under the optional method, an 8% tax is applied to the total contract price including the cost of materials, but excluding VAT.
Social Solidarity Contribution. The Social Solidarity Contribution (SSC) is imposed on the profits and income of companies subject to corporate income tax, as defined by Article 2-III of the Moroccan Tax Code, excluding companies that are permanently exempt from corporate income tax. The SSC is applicable for 2024 and 2025.
For companies subject to the SSC, this contribution is calculated on the basis of the taxable income on which corporate income tax is computed that is equal to or greater than MAD1 million for the latest closed financial year. The following are the rates of the SSC:
• 1.5% for companies with taxable income ranging from MAD1 million to MAD5 million
• 2.5% for companies with taxable income ranging from MAD5 million to MAD10 million
• 3.5% for companies with taxable income ranging from MAD10 million to MAD40 million
• 5% for companies with taxable income exceeding MAD40 million
Tax incentives. Morocco offers the same tax incentives to domestic and foreign investors. Various types of companies benefit from tax exemptions and tax reductions, which are summarized below.
Permanent exemptions. Permanent tax exemptions are available to agricultural enterprises and cooperatives with annual turnover of less than MAD5 million.
Capital risk companies are exempt from corporate income tax on profits derived within the scope of their activities (these are profits related to purchases of companies’ shares that support such companies’ development and the sales of such shares thereafter).
Business expenses are generally deductible unless specifically excluded by law. The following expenses are not deductible:
• Interest paid on shareholders’ loans in excess of the interest rate determined annually by the Ministry of Finance or on the portion of a shareholder’s loan exceeding the amount of capital stock that is fully paid up. No interest on shareholders’ loans is deductible if the capital stock is not fully paid up.
• Certain specified charges, gifts, subsidies, corporate income tax and penalties.
Inventories. Inventory is normally valued at the lower of cost or market value.
Provisions. Provisions included in the financial statements are generally deductible for tax purposes if they are established for clearly specified losses or expenses that are probably going to occur.
Provisions on bad debts are deductible if a court action is introduced against the debtor within 12 months after the booking of the provision.
Depreciation. Land may be amortized only if it contributes to production (for example, mining lands). Other fixed assets may be depreciated using the following two methods:
• The straight-line method at rates generally used in the sector of the activity.
• A declining-balance method with depreciation computed on the residual value by applying a declining coefficient that ranges from 1.5 to 3 and that is linked to the term of use. The decliningbalance method may not be used for cars and buildings.
The following are some of the annual applicable straight-line rates.
Asset Rate (%)
Commercial and industrial buildings 4 or 5 Office equipment 10 to 15
Motor vehicles (for vehicles used in tourism, the maximum depreciable value is MAD300,000 including VAT) 20 to 25 Plant and machinery 10 to 15
Certain intangible assets, such as goodwill, do not depreciate over time or by use and, consequently, are not amortizable.
Relief for tax losses. Losses may be carried forward for four years; losses attributable to depreciation may be carried forward indefinitely. Losses may not be carried back.
Groups of companies. Moroccan law does not provide taxconsolidation rules for Moroccan companies.
D. Other significant taxes
The following table summarizes other significant taxes.
Nature of tax
Value-added tax, on goods sold and services rendered in Morocco General rate 20
Professional tax; on gross rental value of the business premises and equipment
to 30
E. Miscellaneous matters
Foreign-exchange controls. Remittances of capital and related income to nonresidents are guaranteed. No limitations are imposed on the time or amount of profit remittances. The remittance of net profits on liquidation, up to the amount of capital contributions, is guaranteed through transfers of convertible currency to the Bank of Morocco.
Foreign loans generally do not require an authorization from the exchange authorities. However, to obtain a guarantee for the remittance of principal and interest, notes are commonly filed at the exchange office, either through the bank or directly by the borrower. The loan agreement is also generally filed with the exchange office as soon as it is established.
Transfer pricing. The Moroccan Tax Code provides for the obligation to provide transfer-pricing documentation in the event of a tax audit for companies that have carried out cross-border intragroup transactions, to justify their transfer-pricing policy. The law provides that this documentation must include the following:
• A Master File containing information on all activities of affiliated entities, the overall transfer-pricing policy applied and the distribution of profits and activities worldwide
• A Local File containing specific information on the transactions that the audited company carries out with other companies with dependency links
This obligation applies to the companies meeting either of the following conditions:
• Turnover equal to or greater than MAD50 million
• Gross assets of MAD50 million or more
A sanction for a failure to produce transfer-pricing documentation applies and is calculated at a rate of 0.5% on the amount of transactions related to the non-produced documents, with a minimum of MAD200,000.
The details of application of the transfer pricing documentation provisions will be determined by decree, which had not yet been issued at the time of writing.
Country-by-Country reporting. The 2020 Finance Law introduced an obligation to report the worldwide distributions of profits of
(a) No withholding tax is imposed in France if the recipient is subject to tax on the dividend in Morocco.
(b) Tax is payable in the source country of revenue.
(c) The 7% rate applies if the beneficiary of the dividends is a company, other than a partnership, that holds directly at least 25% of the capital of the payer of the dividends. The higher rate applies to other dividends.
(d) The Maghreb Arab Union countries are Algeria, Libya, Mauritania, Morocco and Tunisia.
(e) Under Moroccan domestic law, the withholding tax rate for interest is 10%. Consequently, for interest paid from Morocco, the treaty rates exceeding 10% do not apply. In addition, the domestic withholding tax rate for dividends is 15%, for dividends that derive from profits earned with respect to financial years opened before 1 January 2023. The 15% withholding tax rate will be decreased by 1.25% per year to reach 10% in 2026. Consequently, for dividends paid from Morocco, the treaty rates exceeding Moroccan withholding tax rate do not apply.
(f) The 5% rate applies if the beneficiary of the dividends holds more than USD500,000 of the capital of the payer of the dividends. The 10% rate applies to other dividends.
(g) The 5% rate applies if the beneficiary of the dividends holds directly at least 10% of the capital of the payer of the dividends. The 10% rate applies to other dividends.
(h) The 5% rate applies if the beneficiary of the dividends is a company that holds directly at least 10% of the capital of the payer of the dividends. The 10% rate applies to other dividends.
(i) The 5% rate applies if the beneficiary of the dividends is a company, other than a partnership, that holds directly at least 25% of the capital of the payer of the dividends. The 10% rate applies to other dividends.
(j) The 6.5% rate applies if the beneficiary of the dividends is a company, other than a partnership, that holds directly at least 25% of the capital of the payer of the dividends. The 10% rate applies to other dividends.
(k) The 6% rate applies if the beneficial owner of the dividend is a company (other than a partnership) that holds directly at least 25% of the capital of the company paying the dividends. The 10% rate applies in all other cases.
(l) The 7% rate applies if the beneficial owner of the dividends is a company that holds directly at least 25% of the capital of the company paying the dividends. The 10% rate applies in all other cases.
(m) The 6% rate applies if the beneficial owner of the dividends is a company that owns directly at least 25% of the capital of the company paying the dividends. The 10% rate applies in all other cases.
(n) The 5% rate applies if the beneficiary of the dividends is a company that holds directly at least 10% of the company paying the dividends in the following cases:
• If the company paying the dividends is a resident of Japan, 10% of the voting power of that company
• If the company paying the dividends is a resident of Morocco, 10% of the capital of that company
The 10% rate applies in all other cases.
Morocco has ratified tax treaties with Albania, Azerbaijan, Estonia, Mauritius, São Tomé and Príncipe, South Sudan and Yemen, but these treaties are not yet in force.
Morocco has signed tax treaties with Bangladesh, Burkina Faso, Cape Verde, the Comoros Islands, Congo (Republic of), GuineaBissau and Iran, but these treaties have not yet been ratified.