Morocco Unveils New Tax Rules for Expats Renting Property: 20% Flat Rate Option Coming in 2025

Before taxation, a flat-rate deduction of 40% is applied to the gross amount of rental income. This net income is then subject to tax according to the progressive rates provided for in the general scale.

Taxable gross rental income from property rented to legal entities in the public or private sector, or to individuals whose professional income is determined according to the actual or simplified net income regime, is subject to withholding tax.

This withholding tax is calculated according to two non-liberatory proportional rates:
• 10% when the annual gross rental income is less than 120,000 dirhams
• 15% when the income is equal to or greater than this threshold

However, since January 2025, it is possible to opt for a 20% liberatory tax rate, applicable to the gross amount of rental income subject to withholding tax. This option exempts the taxpayer from the obligation to file an annual return for the portion of income that has been subject to this withholding.

Otherwise, the taxpayer is required to file, electronically, an annual return of their total income before March 1st of the year following the year in which the income was acquired, and to pay the corresponding tax.

When withholding tax has been deducted at the non-liberatory rates of 10% or 15%, the amount of this withholding is deductible from the tax due for the year in which the income was received.

The declaration and payment of the tax must be made via the online SIMPL service, accessible at www.tax.gov.ma. The applicable income tax scale is set by brackets, ranging from 0% to 37%, with deductible amounts specified in the guide.