Tax Crackdown Rocks Morocco’s Real Estate: Developers Face Audits Over Cash Schemes

The tax authorities in Morocco have launched a series of tax audits targeting real estate developers and companies, suspected of using undeclared payments in real estate transactions. These controls, which are particularly focused in Casablanca, Marrakech and Tangier, concern residential projects, including some benefiting from the direct housing assistance program.

The investigations have highlighted several techniques used to conceal part of the sale price. One of them consists of collecting cash advances in the form of "reservation amounts", and then finalizing the sale at a lower official price without accounting for these sums. Another trick is the signing of fake "development contracts" in parallel to justify additional cash payments.

The action of the tax authorities was triggered by strong signs of fraud, corroborated by reports from clients forced to pay part in cash. The inspectors relied on an analysis of the developers’ declarations, which revealed declared sale prices lower than the official reference prices. Following requests for clarification, on-site checks were carried out, leading to tax audit procedures.

This phenomenon of tax evasion is concentrated on medium and high-end housing. According to the sources cited by the press, these maneuvers aim to circumvent the full payment of taxes, including the new procedures allowing taxpayers to have the amount of tax due validated in advance by the administration to avoid a subsequent revision.