Morocco Scales Back Tax Incentives for Foreign Investors in 2020 Budget

Morocco now intends to set itself apart from the attractive (aggressive) policy for attracting foreign investment. After approving the Fatca agreement on the exchange of banking data in 2018 and the abolition of the advantages granted to offshore companies (symbolic corporate tax for more than a decade, reduced personal income tax for employees and VAT exemptions) in 2019, the 2020 Finance Bill now targets the free zones and the CFC (Casablanca Finance City), reports the daily Aujourd’hui le Maroc.

For the same media, the Government wishes to standardize the corporate tax (IS) scale for exporting companies and align the CFC taxation with national standards for the next five years.

The same source also notes that in recent years, the arrival or rather the announcement of the participation of large Chinese companies in major industrial projects has been marked.

"While no official communication has been made on this subject, it seems that Chinese capital would have demanded significant facilities from the Moroccan authorities in the form of commitments.

However, the content of the latest finance bill suggests a radical change in the policy of attracting foreign investment in the Kingdom," specifies the newspaper, which recalls that the arrival of foreign companies should no longer be done solely from a tax point of view and through economic benefits.

In this regard, the reaction of Chinese companies is highly anticipated in the coming days and weeks, in view of the evolution of Moroccan tax policy and as a follow-up to the recommendations of the last National Symposium, held last May.