Morocco Remains on EU Tax Haven Gray List Due to Casablanca Finance City Reforms Delay

At the current stage, Morocco has fulfilled all its obligations towards the European Union, the last stage of its exit from this gray list, which should only take place in 2021. Like Australia, the kingdom was required to modify or abolish its harmful tax regimes, no later than the end of 2019. Unfortunately, the delays due to the OECD (Organization for Economic Co-operation and Development) Forum procedure on harmful tax practices have slowed down the procedure. A grace period has been granted to them and which runs until the end of 2020 in order to adjust their tax legislation.

Today, the Kingdom has removed the incentive schemes of offshore banks, financial holdings in order to convince Brussels. It has also reviewed two preferential tax regimes, namely those of export processing zones and exporting companies through the 2020 finance law. The other detail to be settled is the CFC case, whose tax regime is considered "harmful" by Brussels.

In this regard, the government adopted, on September 24, a draft decree-law reorganizing Casablanca Finance City at the Council of Government and published in the latest Official Bulletin. Thanks to this decree-law, service companies with CFC status and created from January 1, 2020 are invited to pay, after the five-year exemption period, a corporate tax at a flat rate of 15% against 17.5% initially planned for the smallest companies that do not benefit from any incentive measure.