Morocco legal and accounting and tax considerations in 2023
Corporate tax regime
- Corporate income tax in Morocco is imposed at a standard rate of 30% however, a higher rate of 37% is applicable for credit institutions and leasing companies. All legal entities must register for taxes with the General Management of Taxes and Financial Statements along with corporate tax return submission are due 3 months after the financial year end of the company;
- A corporate tax rate of 8% may be applicable on the total contract price for foreign companies established in Morocco and engaging in engineering contracts, industrial and technical installations or construction and/or assembly projects;
- Capital gains are treated as ordinary corporate income in Morocco and are subject to a capital gains tax at the normal corporate tax rate of 30% with an increased rate of 37% for credit institutions and leasing companies;
- A Value Added Tax (VAT) at the rate of 20% is applicable on the sale of goods and services. A reduced rate of 7%, 10% and 14% is applicable on companies engaged in specific activities including financial services such as banking and credit facilities, gas, water, leasing and electricity;
- VAT is required to submitted quarterly if the turnover is below MAD 1 million and monthly if it’s above MAD 1 million, and submission is due one month after the end of the assessed period;
- For Bookkeeping and Financial Statements, they must be in French and performed in GAAP.
Withholding tax and tax treaties
- A 10% withholding tax is applicable on interests and royalties paid to non-resident companies unless the same is reduced where a double tax treaty is applicable;
- Additionally, a 15% withholding tax is applicable on dividends paid to non-resident companies unless reduced where a tax treaty is applicable;
- Other withholding taxes in Morocco include i) a 15% branch remittance tax applicable on profits remitted to the parent company ii) a 10% withholding tax applicable on technical services fees paid to non-resident companies with no registered office in Morocco;
- The Kingdom of Morocco has entered into at least 42 double taxation treaties with different countries including i) Singapore ii) Switzerland iii) United Kingdom iv) United States v) Canada vi) Germany and vii) United Arab Emirates.
Miscellaneous tax information
- Employers in Morocco are required to submit a social security contribution of 16% of their employees’ monthly salaries to the National Social Security in Casablanca (CNSS);
- Companies in Morocco may carry forward their business tax losses for a period of not more than 4 years, a carryback of losses is however not allowed;
- Healy Consultants will assist the Client with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparing financial accounting records and iv) preparing forecasts, budgets and performing sensitivity analysis;
- It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.