Our taxation specialists, who keep up-to-date with alterations in their own field of expertise, are at your disposal to offer solutions that allow you to benefit from the tax breaks and exceptions offered by Moroccan tax authorities. Below, an overview of the main duties and taxes imposed in Morocco.

Tax on your licence to trade (Impot sur la Patente):

This tax is paid by all persons and entities working in a commercial or manufacturing activity. The tax is calculated as follows: a proportional tax is imposed by means of a series of thresholds based mainly on the rental value of the premises, real estate elements and the filed of business activity.

All persons and entities working in a professional, trading or manufacturing capacity are exempt from the above tax for the first five years of work in any field of business activity.

IS:
Corporation tax (Impot sur les Societes - IS) :

The rate of taxation on companies (similar to corporation tax) is 35% (this rate will descend to 30% in the financial year 2008).

Corporation tax is imposed on the profits or income of companies and other entities (companies referred to as sociétés en nom collectif (SNC) in Moroccan legislation are taxed using either the IS or IR system).

EXEMPTION FOR CORPORATION TAX (IS): (examples of fields of business activity affected):

• Companies exporting products and services are exempt from corporation tax (IS) for five years from the date of commencement of the activity and then benefits from a 50% reduction in the tax after this period expires.

• Businesses based on handicrafts (former cottage industries) and businesses located in prefectures and provinces whose level of economic activity allows them to offer tax breaks will benefit from a 50% reduction in corporation tax (IS) for the first five years.

• Hotel and catering businesses, as regards their hotel establishments as regards the proportion of the tax base corresponding to their turnover in foreign currency repatriated directly by them or on their behalf through travel agencies acting as intermediaries, benefit from:
complete exemption from corporation tax for a period of five consecutive years running from the financial year in which the first accommodation was provided paid for in foreign currency; and from a 50% reduction in this tax after the five year period.

IR:
Income tax (Impôt sur le revenu IR):

Income tax is imposed on the entire income of sole traders or legally constituted groups (choice of opting for SNC status). This tax is payable on revenue from the following sources.

  A/ Professional income
  B/ Salary income and income from other source (salaries and payments)
  C/ Income arising from real estate property

The entire income used to calculate amounts of tax due is considered to be net income (or incomes) from one or more sources of revenue.
Income tax: income tax on income exceeding the tax brackets shown below is set at 42%. The tax brackets used to calculate income tax to be paid are as follows:
(These thresholds are valid from January 1st 2007).

VAT:

Value added tax (taxe sur la valeur ajoutée TVA) :

Manufacture, trade, handicrafts and professional economic activity carried out within Morocco and imports are all subject to value added tax.

Rates of VAT:

 1.The normal rate of VAT is 20%
 2.14 % on construction *, transport of passengers and goods, light delivery vehicles     – so-called véhicules utilitaire léger économique, etc.
 3.10 % on the sale of foods or drinks for consumption on the premises in restaurants, transactions associated with loans, banks and exchanges, real estate property for use as tourist accommodation, etc.
 4.7 % on basic necessities

*(construction is subject to the normal rate of 20% from January 2008).

Capital Gains Tax (TPA):

TPA is payable on profits made within Morocco by entities belonging ultimately to companies whose head offices are based outside of Morocco when such profits are made available to such foreign-based companies.

It is also payable on net profits (dividends).
This tax is deducted at source. The rate of the tax is fixed at 10%.