Tax Figures
Corporate Income Tax
The current corporate income tax rate (impôt sur les sociétés) is 30%. However, a special rate of 37% applies to insurance and banking and financial institutions.
Preferential rates apply to companies with a taxable income of MAD 300,000.
The fiscal year begins on 1 January and ends on 31 December of the same year.
Companies must file a corporate income tax return together with a copy of the financial statements with the inspector of direct taxes for the district in which their company headquarters are located within 3 months after the end of the fiscal year.
Companies must make advance payments of corporate income tax. For companies with a 31 December year-end, the payments must be made by 31 March, 30 June, 30 September and 31 December. Each payment must be equal to 25% of the previous year’s tax. If the minimum tax does not exceed MAD3,000, it is fully payable in one instalment. Payment of the minimum tax exceeding this amount is made in accordance with the rules applicable to the corporate income tax.
The corporate tax amount cannot be lower than a minimum contribution (MC), MAD 1500 and must be made in a single payment, before the end of the third month following the start of the current financial year.
Income Tax Rate
- 0 – MAD 30,000: 0
- MAD 30,001 – 50,000: 10
- MAD 50,001 – 60,000: 20
- MAD 60,001 – 80,000: 30
- MAD 80,001 – 180,000: 34
- Above MAD 180,001: 38
Payroll Tax
No
Sales Tax
VAT is imposed on the supply of taxable goods and services in Morocco. Taxable persons charge VAT on their taxable supplies (output tax) and are charged with VAT on goods which they receive (input tax).
The current standard rate of VAT imposed on taxable goods and services is 20%, with reduced rates of 14%, 10% and 7%.
Withholding Tax
Morocco imposes withholding tax (WHT) on certain classes of income earned by non-residents:-
- Dividends: 15%
- Royalties, patents, know-how, technical assistance fees and remuneration for most services: 10%
- Interest: 10%/20%/30%
- Rental on equipment: 10%
- Indemnity for non-permanent employees: 30%
A reduced rate may be available under an applicable Double Tax Treaty.
Other Tax
- Professional tax, on gross rental value of the business premises: 10-30%
- Local services tax; annual tax on the rental value for professional tax purposes: 6.5-10.5%
- Registration duties, on transfers of real property or businesses: 1-6%
- Contribution to support social cohesion (la contribution pour l’appui à la cohésion sociale); payable by companies, public institutions, associations and other similar organizations, funds liable to corporation tax, coordination centers and other legal entities with a net income exceeding MAD 15million: 0.5 – 2%
Time to prepare and Pay Taxes
211 hours
Employers Social Security and statutory contributions
Employers are required to make the following contributions:
- Family benefits: 6.4%
- Death and other daily compensation for illness, pregnancy etc: 8.6% (capped at MAD 6,000)
- Professional training tax: 1.6% (uncapped)
- Mandatory health insurance: 3.5% (uncapped)
Employees Social Security and statutory contributions
Employees are required to make the following contributions:
- Death and other daily compensation for illness, pregnancy etc: 4.29% (capped at MAD 6,000)
- Mandatory health insurance: 2.0% (uncapped)
Payroll
Foreign companies operating in Morocco may find it challenging to deal with the complexities of the country’s tax system. The primary concerns for a foreign company that needs to comply with tax laws in Morocco are: Individual income tax (IIT) for employees in Morocco, social security costs, VAT, withholding tax, business tax and permanent establishment concerns.
Remote Payroll
A remote payroll in Morocco is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Morocco. This applies to both local and foreign employees. One option for a non-resident company to payroll its employees (local and foreign) in Morocco is to use a fully outsourced service like a GEO or PEO which will employ and payroll the staff on their behalf.
Local Payroll Administration
In some cases, a company will register their business in Morocco under one of the forms available but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Internal Payroll
Larger companies with a commitment to Morocco may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete the incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Moroccan payroll and can fulfil all tax, withholding tax and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Moroccan employment laws.
Currency
Morocco dirham, MAD
