Morocco Unveils Tax Reforms to Boost Economic Recovery Amid Pandemic

The 2020 Amending Finance Bill provides, among other things, for encouraging taxpayers to use mobile payment more and strengthening Morocco’s foreign exchange reserves.

It is based on three main pillars: supporting the gradual resumption of economic activity, preserving employment, and accelerating the implementation of administrative reforms.

On the tax front, the following measures are announced:

• Spreading of contributions paid by entities to the Special Fund for the Management of the Covid-19 Pandemic and deductibility of the corresponding expenses by amortizing them at a constant rate over 5 fiscal years starting from the 2020 fiscal year.

• 50% reduction in registration fees applicable to the acquisition of real estate for residential use. This measure applies to deeds that will be drawn up during the period from the publication of the 2020 Amending Finance Law until December 31, 2020, for acquisitions not exceeding 1 million dirhams.

• Extension of 6 months of the deadlines for conventions relating to social housing construction programs.

• Introduction of a 25% deduction on the taxable base of the turnover generated by mobile payment by individuals with professional income determined according to the simplified net income system or the flat-rate profit system.

• Postponement of the deadlines for the exceptional measures relating to the voluntary regularization of the tax situation of taxpayers:

• who file a voluntary corrective tax return for IS, IR, VAT, WHT, stamp duty and insurance contract taxes until December 15, 2020;

• who have not filed their annual global income tax return for rental income, for previous years not prescribed until December 31, 2020.

• who have liquid assets, movable and immovable property, current account advances to partners and loans granted to third parties. The 2020 Amending Finance Law has provided for the postponement of the deadline for filing and payment to December 15, 2020.

Also announced is the extension of the deadline for filing the declaration and paying the liberating contribution on assets and liquidity held abroad until December 31, 2020 instead of October 31, 2020, initially set by the 2020 Finance Law; and the introduction of this liberating contribution set, in the 2020 Finance Law, at 1.5% of the amount of the unpaid check(s) capped at 10,000 DH for individuals and 50,000 DH for legal entities, for fines related to payment incidents of any rank, not yet regularized, for checks presented for payment between March 20, 2020 and June 30, 2020.