Morocco Lures Expat Retirees with Massive Tax Breaks on Foreign Pensions

Significant tax deductions

Foreign-source retirement pensions or annuities are subject to a flat-rate deduction on their taxable gross amount:
• 70% deduction on the portion of the annual gross pension less than or equal to 168,000 dirhams
• 40% deduction on the portion exceeding 168,000 dirhams

These deductions allow for a significant reduction of the taxable base.
An 80% reduction in the tax due

In addition to the deduction, a reduction equivalent to 80% of the income tax can be applied, provided that the pension is permanently transferred to Morocco in non-convertible dirhams.

This reduction is subject to this effective transfer, through a banking institution or an organization involved in the payment of pensions.

A mandatory declaration

To benefit from these measures, the retiree must imperatively:
• File electronically, before March 1st of each year, the declaration of his global income for the previous year

Attach the following supporting documents:
• A certificate of pension payments issued by the debtor or any equivalent document
• A bank certificate indicating:
— >The amount received in foreign currency
— >The countervalue in dirhams on the day of the transfer

This declaration, as well as the electronic payment of the tax if applicable, must be made via the official portal.

Note:

• Only foreign-source pensions are covered by this system
• The retiree must be a tax resident in Morocco
• The advantage only applies in case of permanent transfer of pensions in non-convertible dirhams
• The progressive income tax scale remains applicable after deduction