Morocco Lures Foreign Retirees with Generous Tax Breaks on Pensions

The mechanism first relies on a substantial flat-rate deduction applied to the annual gross pension amount. This first lever, which significantly reduces the taxable base, is broken down into two thresholds:

• 70% on the portion of the annual amount not exceeding 168,000 dirhams;
• 40% on any surplus beyond this threshold.

But the system does not stop there. Once the tax has been calculated on this already reduced income, the retirees concerned can claim an additional 80% reduction of the total amount due. This is the real icing on the tax cake, but the granting of this benefit is subject to two strict conditions:

• The transfer of the pension to Morocco must be done on a permanent basis.
• The payment must be made into a non-convertible dirham account, ensuring that these funds will be spent in the local economy.

To benefit from this windfall, however, one must show a clean slate and comply with precise declarative obligations. Each year, before March 1st, the taxpayer is required to file an electronic declaration of their total income for the previous year. In order to justify their situation, retirees must attach the following essential supporting documents to their file:

• A certificate of payment of pensions issued by the foreign paying body or any equivalent document.
• A certificate from the credit institution (or other paying body in Morocco) indicating the amount received in foreign currency as well as its countervalue in dirhams on the day of the transfer.
• A well-defined framework aimed at simplifying the lives of retirees while encouraging the transfer of funds to the kingdom.

NB: This article is based on the 2024 tax guide. Changes may have occurred in the meantime. We will be sure to update it for the 2025 version as soon as it is released.