Morocco Overhauls Tax System to Align with EU Standards, Raises Corporate Rates

The 2020 Finance Bill introduces seven tax measures that have everything to please economic operators. In addition to companies, Le360 indicates that all taxpayers who were taxed at 17.5% will see their taxes increase, for the 2020 fiscal year, to 20%.

Moreover, from 2020 onwards, exporting companies that will be established in Morocco will be taxed at 20% from the first export operation. And that’s not all. They will pay 20%, even for the portion exceeding 1 million dirhams.

Same pill for real estate developers, private educational and training institutions, mining companies, hotel establishments (guest houses, riads and RIPT) and tourist entertainment, craft companies, as well as sports clubs, with the only difference that these companies will retain the advantage of the five-year exemption for Corporate Income Tax (CIT).

Similarly, the free zone status will be replaced by industrial acceleration zones where a CIT rate of 15% will be applied to structures already installed there, beyond a five-year exemption period from the start of operation.

Companies with service status like Casablanca Finance City will continue to benefit from total tax exemption for a period of five years but will then move to a rate of 15%.

Also, the common law rate will be 0.50% and raised to 0.75% when, beyond the exemption period of 36 months, the current result excluding depreciation is negative for two consecutive fiscal years.