Moroccan Expats Face New Tax Rules on Rental Income: What You Need to Know

For the many Moroccans residing abroad who own real estate in Morocco, renting out this patrimony is a welcome source of income. But this activity comes with specific tax obligations that it is essential to know in order to remain in compliance with the administration. The tax guide clarifies the framework, between possible exemption and mandatory declaration.

The first good news for owners is the existence of a total exemption from property income tax. However, one should not claim victory too quickly: this benefit only applies if the annual gross rental income does not exceed the threshold of 30,000 dirhams. The tax authorities also specify that this tax gift cannot be combined with other tax relief that the taxpayer could benefit from on other types of income.

For those whose rental income exceeds this ceiling of 30,000 dirhams, taxation applies according to two brackets. These rates are proportional and do not release the taxpayer from their other declarative obligations:

• 10% for taxable gross income below 120,000 dirhams;
• 15% for those equal to or greater than 120,000 dirhams.

To comply, it is imperative to file an annual declaration of rental income electronically. It is better not to play with fire when it comes to deadlines: the declaration and payment of the tax due must be made before March 1st of the year following the year in which the rents were received, via the tax portal (SIMPL service).

The tax authorities provide an important clarification for income received before March 1, 2023. These had to be the subject of a specific declaration, an obligation that applied even to owners whose income did not reach the exemption threshold. Finally, if the tenant of the property makes a withholding tax on the rent, the owner can deduct this amount from the final tax to be paid, provided that this deduction corresponds to the year of receipt of the income.