The Moroccan tax system is modeled after the French system and consists of direct and indirect taxes.. It is a complex system with most information supplied in Arabic or French. Most foreigners paying taxes within the country choose to hire a tax attorney, often with the help of their company, to navigate tax law.

Who Pays taxes?

Morocco Expats that are full-time residents are taxed on worldwide income rated on a progressive scale based on income level. Income under $2795 is not taxed. The Ministry of Economy and Finance monitors Morocco's finance and taxes. The website is available in Arabic, French and English, although forms are only available in French.

An expat is a full-time resident if:
• Permanent home is in Morocco
• Stay in Morocco for at least 183 days within the period of one-year
• Morocco is the center of economic interest

Expats with secondary residences in Morocco (not living there full-time) are only taxed on Moroccan-sourced income. All income is taxable including salaries and wages, annuities and pensions, investment and property income. Married couples are taxed separately.

Income Tax

Income Tax (Impôt Général sur le Revenu or IGR) includes:

• Business income
• Wages and salaries
• Agricultural income
• Income and profit from rent
• Income and profit from movable capital. Income tax is generally levied on aggregate income at progressive rates

Tax rates fluctuate between 13 and 44 percent dependent on income. An average income of between 45,001 to 60,000 DH per year is taxed at 35 percent.

Property Tax

Homeowners in Morocco are also subject to Property Taxes (Taxe d'habitation) assessed by local authorities. Rental properties and primary residence taxes are determined by the assessed rental value. The general rate is 10 percent for a non-primary residence, and 25 percent on a primary residence. Primary and secondary occupation rates are based on a progressive scale. Any new buildings are exempt from property tax for the first 5 years after the completion of the building.

A standard deduction of 40 percent of the gross rental income covers the income-generating expenses in lieu of itemized deductions.

VAT

Value-added tax is a non-cumulative tax levied at each stage of the production and distribution cycle. Suppliers of goods and services must add VAT to their net prices. Standard VAT is 19 percent and on goods and services, except specific items such as banking and credit services, leasing, gas, water and electricity that have a reduced rate of 7 percent and applies to building and construction activities at a rate of 14 percent.

Reporting

Taxes must be filed yearly by separate individuals by March 31. There is no joint filing of married couples.

There are no concessions for foreign nationals working in Morocco, but the cost of home travel is exempt from tax every two years.

Reciprocal Tax Agreements

The Moroccan government is eager to encourage foreign investment. Double tax treaties exist that may provide tax relief where a tax resident also pays income tax in another country. Morocco maintains many treaties for the prevention of double taxation, mainly with developed countries.

Treaty Partners
• Belgium
• Canada
• France
• Germany
• Italy
• Luxembourg
• the Netherlands
• Norway
• Romania
• Spain
• Sweden
• Tunisia
• United Kingdom
• United States

Non-residents from treaty countries can obtain a partial or total refund of tax withheld by the Moroccan paying agent. Since a Moroccan resident is taxed on worldwide income, the Moroccan tax system provides relief from foreign taxes paid on such worldwide income by means of a foreign tax credit. This foreign tax credit cannot exceed the Moroccan tax otherwise payable in respect of the foreign-source income.

Most of the tax treaties are based on the OECD model and do not contain specific anti-abuse provisions. Reduced withholding tax rates vary from one treaty to another, and in the case of the treaty with Sweden, the rate is zero. France's treaty offers advantages involving self-employed foreigners and payments for technical assistance and contracts.

Consult with your embassy to find out if your country has an agreement and for further information.

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