Morocco’s Tax Revolution: Big Business Faces New Withholding Rules

Implemented for corporate tax and income tax in 2023, and then extended to VAT in July 2024, the withholding tax has proven its effectiveness, contributing to improving transparency and boosting tax revenues. As of January 1, 2026, in addition to the State, local authorities and public institutions, banks and credit institutions, insurance and reinsurance companies, as well as all companies with a turnover equal to or greater than 50 million dirhams excluding VAT for the last closed financial year, will have to deduct and pay over these taxes to the Treasury. This measure will not fail to generate debates, particularly on the 50 MDH threshold, which many consider too low.

Concretely, the withholding tax on VAT concerns two main categories of operations. On the one hand, the supply of capital goods and works. On the other hand, services as a whole: installations, repairs, rental of premises, transport, brokerage, or the exploitation of patents and trademarks. However, exceptions are provided for, such as the sale of electricity and water, telecommunications services, or small services under 5,000 DH including tax, within the limit of 50,000 DH per month and per supplier.

This reform is aimed in particular at Moroccan medium and large enterprises. According to the Moroccan Observatory of SMEs, these medium and large enterprises represent only 1.9% of the private sector in 2023, but generate the bulk of national turnover. Their integration into the system should therefore considerably broaden the collection base and consolidate the good results observed since 2024.

On the professional side, this extension was expected. "The extension of the withholding tax was expected. The results of the 2024 phase have demonstrated its exceptional effectiveness. It is therefore logical that the system should now extend to other players, particularly large companies. In the long run, it could be generalized to all current operations, regardless of the company’s profile," confirms an accountant with Médias24.