Comparative Guides

Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.

Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.

Start by selecting your Topic of interest below. Then choose your Regions and finally refine the exact Subjects you are seeking clarity on to view detailed analysis provided by our carefully selected internationally recognised experts.

4. Results: Answers
Corporate Tax
1.
Basic framework
1.1
Is there a single tax regime or is the regime multi-level (eg, federal, state, city)?
Morocco

Answer ... There is a single tax regime, which applies to all companies that are subject to tax in Morocco.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
1.2
What taxes (and rates) apply to corporate entities which are tax resident in your jurisdiction?
Morocco

Answer ... Corporate income tax: Corporate income tax is calculated according to the following progressive scale.

Net profit amount Rates
Less than or equal to MAD 300,000 10%
From MAD 300,001 to MAD 1 million 17.5%
More than MAD 1 million 31%

Business tax: Business tax is based on the annual rental value. The rates vary according to the nature of the activity carried out, as follows.

Rank 3 10%
Rank 2 20%
Rank 1 30%

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
1.3
Is taxation based on revenue, profits, specific trade income, deemed profits or some other tax base?
Morocco

Answer ... Corporate income tax is calculated on the basis of net taxable profits, while business tax is based on the amount of the annual rental value.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
1.4
Is there a different treatment based on the nature of the taxable income (eg, gains on assets as opposed to trading income or dividend income)?
Morocco

Answer ... The nature of the taxable income may have an impact on the tax rates. Some products are subject to withholding tax, such as income from shares (15%) and fixed-income investment products (20%); while trading income is taxed according to the progressive scale set out in question 1.2.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
1.5
Is the regime a worldwide or territorial regime, or a mixture?
1.6
Can losses be utilised and/or carried forward for tax purposes, and must these all be intra-jurisdiction (ie, foreign losses cannot be utilised domestically and vice versa)?
Morocco

Answer ... A deficit in a fiscal year may be deducted from the profits in the following fiscal year. In the absence of profits or in the event of insufficient profits to allow for such deduction, the deficit or the balance of deficit may be deducted from the profits in subsequent accounting periods until the fourth year following the financial year of deficit.

Losses incurred by institutions that are not subject to tax in Morocco cannot be deducted from the Moroccan taxable base.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
1.7
Is there a concept of beneficial ownership of taxable income or is it only the named or legal owner of the income that is taxed?
Morocco

Answer ... The concept of beneficial ownership does not exist in Morocco; only the legal owner of the income is taxed.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
1.8
Do the rates change depending on the income or balance-sheet size of the taxpayer?
Morocco

Answer ... Yes, companies in Morocco are subject to tax on a progressive scale, whereby the rate of corporate tax varies according to the amount of taxable profits.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
1.9
Are entities other than companies subject to corporate taxes (eg, partnerships or trusts)?
Morocco

Answer ... Yes, the following entities are also subject to corporate income tax:

  • public institutions that operate on a for-profit basis;
  • associations and similar bodies;
  • funds created by law or by convention which do not have legal personality and are managed by public or private law bodies; and
  • general partnerships and limited partnerships incorporated in Morocco and comprising only natural persons, as well as joint ventures, which are liable to corporation tax upon irrevocable option.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
2.
Special regimes
2.1
What special regimes exist (eg, for fund entities, enterprise zones, free trade zones, investment in particular sectors such as oil and gas or other natural resources, shipping, insurance, securitisation, real estate or intellectual property)?
Morocco

Answer ... The special tax regimes applicable in Morocco are outlined in the table below.

Tax regime Advantages
Free trade zones Exemption from corporate income tax for the first five years and taxation at a reduced rate of 8.75% for the following 20 years.
Casablanca Finance City Exemption from corporation tax for the first five years and taxation at a reduced rate of 8.75% after the expiry of the exemption period.
Exploitation of hydrocarbons Full exemption from corporation tax for a period of ten consecutive years from the date on which any exploitation concession is duly put into production.
Newly created industrial activities Industrial companies that carry out activities specified by regulation benefit from a full exemption from corporation tax for the first five years of exploitation.
Exports Companies that export products or services, excluding recovered metals, and generate export turnover benefit from a full exemption from corporate income tax on that turnover for a period of five years, and from taxation at a reduced rate of 17.5% upon expiry of this exemption.
Hotel companies Exemption from corporate income tax for five years and taxation at a reduced rate of 17.5% after the expiry of this exemption, for that part of their taxable base corresponding to their turnover in foreign currencies.
  • Craft enterprises whose production is the result of essentially manual work
  • Private educational and vocational training establishments
  • Sports companies
Taxation at a reduced rate of 17.5% for the first five years following the start of operations.
Farms with a turnover of MAD 5 million Exemption from corporate income tax for their agricultural income.
Agricultural operations Reduced corporate income tax for the first five years. (17.5%).
Exporting mining companies Reduced corporate income tax of 17.5%.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
2.2
Is relief available for corporate reorganisations or intra-group transfers of companies and other assets? Please include details of any participation regime.
Morocco

Answer ... Under the special regime for mergers, merged or divested companies are not taxed at the time of the transaction on the net capital gain realised following the contribution of all fixed assets and equity securities, provided that certain formal conditions are met.

Under this special regime, the merger or division premium realised by the acquirer and corresponding to the capital gain on its participation in the merged or divested company is exempt from tax.

Capital gains resulting from the exchange of shares in the merged or divested company for shares of the acquirer, carried out in the context of merger or divestment transactions, are not taxable for natural or legal persons who are shareholders of the merged or divested company until such time as the shares are sold or withdrawn.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
2.3
Can a taxpayer elect for alternative taxation regimes (eg, different ways to calculate the taxable base, such as revenue-based versus profits based or cash basis versus accounts basis)?
Morocco

Answer ... Moroccan companies are taxed on the basis of their profits. Non-resident successful tenderers of works, construction or assembly contracts can opt for flat-rate taxation (8%), based on the value of the contract excluding value added tax.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
2.4
What are the rules for taxing corporates with different functional or reporting currency from that of the jurisdiction in which they are resident?
Morocco

Answer ... Transactions carried out in foreign currencies must be recorded in the financial statements at the exchange rate prevailing on the transaction date.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
2.5
How are intangibles taxed?
Morocco

Answer ... Intangible assets are taxable for corporate income tax purposes as non-current income.

The capital gain or loss on the sale of intangible assets equates to the difference between the sale price and the cost price of the items.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
2.6
Are corporate-level deductions available for contributions to pensions?
2.7
Are taxpayers from different sectors (eg, banking) subject to different or additional taxes or surtaxes?
Morocco

Answer ... Credit institutions and similar, and insurance and reinsurance companies, are subject to a tax rate of 37%.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
2.8
Are there other surtaxes (eg, solidarity surtax, education tax, corporate net wealth tax, remittance tax)?
Morocco

Answer ... Companies that generate taxable profits of MAD 40 million or more are subject to social solidarity contributions at a rate of 2.5%. The taxable base corresponds to the taxable profit.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
2.9
Are there any deemed deductions against corporate tax for equity?
3.
Investment in capital assets
3.1
How is investment in capital assets treated – does tax treatment follow the accounts (eg, depreciation) or are there specific rules about the write-off for tax purposes of investment in capital assets?
3.2
Are there research and development credits or other tax incentives for investment?
Morocco

Answer ... No. However, there are several exemptions and investment incentives.

All new companies benefit from a full exemption from business tax for the first five consecutive fiscal years. They also benefit from an exemption from value added tax for capital goods to be entered in a capital account, for a period of 36 months from the start of operations.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
3.3
Are inventories subject to special tax or valuation rules?
Morocco

Answer ... Inventories are not subject to any special tax. In Morocco, inventories are valued at cost price, or at the current price if the latter is lower and work in progress is valued at cost.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
3.4
Are derivatives subject to any specific tax rules?
4.
Cross-border treatment
4.1
On what basis are non-resident corporate entities subject to tax in your jurisdiction?
Morocco

Answer ... Non-resident companies are subject to tax based on their taxable income earned in Morocco.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
4.2
What withholding or excise taxes apply to payments by corporate taxpayers to non-residents?
Morocco

Answer ... Remuneration paid to foreign companies for services that they provide to Moroccan taxpayers is subject to a 10% withholding tax.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
4.3
Do double or multilateral tax treaties override domestic tax treatments?
Morocco

Answer ... In principle, tax treaties override national regulations.

However, in practice, it is not always easy to enforce the provisions of such treaties when they are contrary to the provisions of Moroccan tax law.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
4.4
In the absence of treaties, is there unilateral relief or credits for foreign taxes?
Morocco

Answer ... No, tax credits are granted only if there is an applicable tax treaty. The tax credit is also conditional on the issuance of a certificate of payment of tax abroad to the Moroccan tax authorities.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
4.5
Do inbound corporate entities obtain a step-up in asset basis for tax purposes?
Morocco

Answer ... Inbound corporate entities can enter the share capital based on the historical value of the shares. However, this has no real tax impact.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
4.6
Are there exit taxes (for disposed-of assets or companies changing residence)?
Morocco

Answer ... No. However, the sale of assets constitutes non-current income, which is subject to corporate income tax.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
5.
Anti-avoidance
5.1
Are there anti-avoidance rules applicable to corporate taxpayers – if so, are these case law (jurisprudence) or statutory, or both?
Morocco

Answer ... The Moroccan General Tax Code provides for anti-avoidance measures.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
5.2
What are the main ‘general purpose’ anti-avoidance rules or regimes, based on either statute or cases?
Morocco

Answer ... Provisions aimed at avoiding base erosion and profit shifting.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
5.3
What are the major anti-avoidance tax rules (eg, controlled foreign companies, transfer pricing (including thin capitalisation), anti-hybrid rules, limitations on losses or interest deductions)?
Morocco

Answer ... The main anti-avoidance rules allow the Moroccan tax authorities to reject certain transactions which are of a fictitious nature and are aimed solely at achieving tax benefits or at evading tax or reducing the tax amount. The tax authorities can also reject certain transactions carried out between affiliated companies.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
5.4
Is a ruling process available for specific corporate tax issues or desired domestic or cross-border tax treatments?
Morocco

Answer ... Taxpayers can ask the tax authorities to rule on the tax regime applicable to their specific situation in light of the legislative provisions. Such a request may be made in relation to the following:

  • legal and financial arrangements relating to investment projects;
  • restructuring operations of companies and groups of companies located in Morocco; and
  • operations between companies located in Morocco with direct or indirect links of dependence.

The tax authorities must respond to requests within three months of the date of receipt of the request.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
5.5
Is there a transfer pricing regime?
Morocco

Answer ... Yes, there is a transfer pricing regime in Morocco.

Profits that are indirectly transferred, by either increasing or decreasing the purchase or sale price, or by any other means, can be reported in the taxable income.

From 2020 onwards, companies that are directly or indirectly dependent on companies located outside Morocco will have to provide the tax authorities, by electronic means, with transfer pricing documentation to justify their transfer pricing policy.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
5.6
Are there statutory limitation periods?
Morocco

Answer ... The limitation period is set at four years. In the event of failure to report, this period is extended to 10 years.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
6.
Compliance
6.1
What are the deadlines for filing company tax returns and paying the relevant tax?
Morocco

Answer ... The declaration of taxable income must be filed within three months of the end of each financial year.

The tax is paid by advance payment in four instalments, before the expiry of the third, sixth, ninth and twelfth months following the opening date of the accounting period.

Any outstanding balance must be paid before the deadline for the declaration.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
6.2
What penalties exist for non-compliance, at corporate and executive level?
Morocco

Answer ... There are two primary penalties, as follows.

Sanctions for failure to file or delay in filing tax returns: Increases of 5%, 15% and 20% are applicable to the declaration of taxable income, as follows:

  • 5% if the declaration, deeds and agreements are filed within 30 days of the due date and, if an amended declaration is filed after the deadline, giving rise to the payment of additional fees;
  • 15% if the declaration, deeds and agreements are filed after this 30-day period; and
  • 20% for failure to file a declaration, incomplete or insufficient declaration.

Sanctions for late payment of taxes and duties: A penalty of 10% and an increase of 5% will be payable for the first month of delay; thereafter, 0.5% for each additional month or fraction of a month will be added to the unpaid amount.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
6.3
Is there a regime for reporting information at an international or other supranational level (eg, country-by-country reporting)?
Morocco

Answer ... Yes, the Moroccan tax authorities can exchange information with the tax authorities of countries that have signed a double taxation agreement with Morocco.

Credit institutions are entitled to provide information to the tax authorities of countries with which Morocco is considering concluding an automatic information exchange agreement.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
7.
Consolidation
7.1
Is tax consolidation permitted, on either a tax liability or payment basis, or both?
Morocco

Answer ... No, each company is taxed individually.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
8.
Indirect taxes
8.1
What indirect taxes (eg, goods or service tax, consumption tax, broadcasting tax, value added tax, excise tax) could a corporate taxpayer be exposed to?
Morocco

Answer ... Corporate taxpayers are exposed to the following indirect taxes:

  • value added tax;
  • customs duties; and
  • domestic consumption tax.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
8.2
Are transfer or other taxes due in relation to the transfer of interests in corporate entities?
Morocco

Answer ... Transfers of interest are subject to the same tax regime as sales of shares (ie, corporate income tax applies to the capital gains).

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
9.
Trends and predictions
9.1
How would you describe the current tax landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
Morocco

Answer ... The current environment is favourable for investment and encourages business creation – for example, the 2019 Finance Act reduced the corporate income tax rate.

Various business representatives are now lobbying for a review of the value added tax (VAT) regime in Morocco, in order to reduce the VAT impact on companies’ cash flow.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal
10.
Tips and traps
10.1
What are your top tips for navigating the tax regime and what potential sticking points would you highlight?
Morocco

Answer ... Full compliance with the tax rules is recommended and companies should try to make contact anonymously with the tax authorities in case of any questions.

For more information about this answer please contact: Rachid Mejdoubi from CMS Francis Lefebvre Maroc Conseil juridique et fiscal