Personal Income Taxation in Morocco
For tax residents in Morocco, individual income tax is charged on aggregated income. This implies that both, income earned within Morocco, as well as income earned outside Morocco are used for computation of income taxes.
On the other hand, as far as non-residents are concerned, they are only charged on income that has been sourced from within the periphery of Morocco.
Personal Income Tax Rates in Morocco
The following PIT rates are levied in Morocco:
- For an annual taxable income between MAD (Moroccan Dirham) 0 and MAD (Moroccan Dirham) 30,000: PIT is exempted on this particular income slab.
- For an annual taxable income between MAD (Moroccan Dirham) 30,001 and MAD (Moroccan Dirham) 50,000: PIT is levied at a rate of 10%.
- For an annual taxable income between MAD (Moroccan Dirham) 50,001 and MAD (Moroccan Dirham) 60,000: PIT is levied at a rate of 20%.
- For an annual taxable income between MAD (Moroccan Dirham) 60,001 and MAD (Moroccan Dirham) 80,000: PIT is levied at a rate of 30%.
- For an annual taxable income between MAD (Moroccan Dirham) 80,001 and MAD (Moroccan Dirham) 180,000: PIT is levied at a rate of 34%.
- For an annual taxable income higher than MAD (Moroccan Dirham) 180,000: PIT is levied at a rate of 38%.
Taxes on Corporate Income
In accordance to the Corporate Tax regime, all revenues and capital gains are supposed to pay taxation on a Corporate Taxation.
Companies are required to pay tax on the amount of trading income, over and above expenditures. In this aspect, it must also be noted that business expenses that are incurred in the operation of the business are allowed to be deducted for purposes of tax.
Corporate Income Tax Rates
The following rates of Corporate Tax are levied in Morocco:
- For a taxable income between 0 MAD (Moroccan Dirham) and 300,000 MAD (Moroccan Dirham): CIT is levied at a rate of 10%.
- For a taxable income between 300,001 MAD (Moroccan Dirham) and 1,000,000 MAD (Moroccan Dirham): CIT is levied at a rate of 20%.
- For a taxable income higher than 1,000,000 MAD (Moroccan Dirham): CIT is levied at a rate of 31%.
It must also be noted that there are certain exceptional and specific cases under which taxes are levied at different rates. For example:
- The rate of 31% CIT is further decreased by 3% for entities that have industrial operations, lesser than MAD 100 Million.
- A further reduced CIT is applicable across companies with certain activities (like agriculture, and mining).
- An increased rate of 37% is levied as CIT, applicable to credit institutions, insurance companies, as well as Takaful insurance related companies.
Minimum Contribution: Under this stipulation, CIT is supposed to be greater than or equal to at least 0.5% of the turnover. However, this is not supposed to be paid during the first 36 months of operations of the company. It must also be noted that minimum contribution rate is further increased to 0.6% in certain cases.
Other Taxation in Morocco
- Value Added Tax: VAT is levied as a consumption tax in Morocco, at a standard rate of 20%. However, reduced rates of VAT are also applied on certain goods and services, predominantly at rates of 7%, 10%, and 14%.
Additionally, some supplies of goods and services are also zero-rated when it comes to supplies. They mostly include exported goods and services, certain agricultural equipment, investment products, and all activities related to hydrocarbon exploration.
In the same manner, staple food items, including meat, milk, eggs and bread are also exempted from VAT filing.
- Custom Duties: Custom Duties are levied in Morocco at a standardized rate of 20%, across most imported goods and services. However, for remaining imported goods, reduced custom duties are levied at rates of 7%, 10% or 14%.
Furthermore, a special importation tax is also levied at a rate of 0.25% on the value of all goods and services.
- Excise Taxes: Excise Taxes are also levied on imported goods and services in Morocco. They are primarily levied on tobacco, and alcohol related goods and services.
- Professional Taxes: Professional Tax is levied across all individuals and business entities that carry out professional activities in Morocco. The tax mostly ranges from 10% to 30%. However, business are exempt from this particular tax in the first 5 years of their operations.
- Registration Duties: Registration duties are imposed in Morocco, at rates varying from 1% to 6%. However, a flat rate of MAD 200 is also applicable on specific operations. For goodwill transfer, Registration Duties are levied at a rate of 6%.