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Morocco Individual - Income determination

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The categories of revenues and capital gains subject to individual income tax are the following:

  • Salary revenues.
  • Professional revenues.
  • Revenues derived from agricultural farms.
  • Real estate revenues and capital gains.
  • Revenues and capital gains on financial instruments.

Salary revenues

The net taxable salary corresponds to the gross wage, including benefits and payments in kind or cash, granted to the employee reduced by the amount of social security contributions.

Some exemptions are provided (e.g. allowances granted to cover employment expenses).

Pension revenues

Finance Law 2015 sets a progressive scale for the deductions applied to pension revenues as follows:

  • 55% on the pension income not exceeding MAD 168,000 yearly.
  • 40% on the pension income exceeding MAD 168,000 yearly.

Individuals resident in Morocco benefit from a reduction of 80% of individual income tax relating to pensions of foreign source duly repatriated to Morocco.

Professional revenues

Under the standard regime, the tax basis of professional revenues is the difference between trading income and expenditure.

Revenues derived from agricultural farms

Low-scale individual farmers

Individual farmers that realise annual turnover of less than MAD 5 million qualify for a total exemption of individual income tax starting from 1 January 2014. If such individuals realise turnover that exceeds MAD 5 million in say year (n), they become liable to individual income tax in year (n), year (n+1), year (n+2), and year (n+3).

Moreover, such individuals qualify for a reduced rate of 20% during the first five fiscal years following the first year during which they become liable to individual income tax.

Medium and large-scale individual farmers

Finance Law 2014 provides for a progressive approach to tax medium and large-scale individual farmers that realise annual turnover exceeding MAD 5 million.

As such, the above individuals realising annual turnover that exceeds MAD 35 million, MAD 20 million, or MAD 10 million should become liable to individual income tax, respectively, in 2016, 2018, and 2020.

Moreover, such individuals qualify for a reduced rate of 20% during the first five fiscal years following the first year during which they become liable to individual income tax.

Real estate revenues and capital gains

Real estate revenues

Rental income is subject to individual income tax (based on the gross amount) at the following rates:

  • 10% for annual gross revenues lower than MAD 120,000;
  • 15% for annual gross revenues equal to or exceeding MAD 120,000. 

Real estate capital gains 

Capital gains earned from the sale of properties by individuals are subject to a flat rate of 20% of capital gains. The tax amount cannot be lower than 3% of the selling price.

The capital gain derived from the sale of real estate is calculated as follows:

Capital gain = (selling price - selling expenses) - (updated purchasing price + purchasing expenses)


  • ‘purchasing price’ includes the investment expenses and interests on loans for investment financing, and
  • ‘updated purchasing price’ corresponds to the ‘purchasing price’ times a coefficient set by the tax authorities based on a cost of living index.

Capital gains derived from the sale of property benefit from an exemption of the individual income tax if it is used as a principal residence for at least six years.

Revenues and capital gains on financial instruments

Revenues on financial instruments

The individual income tax is levied on revenues of shares (dividends) as well as revenues of fixed income instruments (interests) at the following rates:

Nature of revenue     Tax rate (%)
Dividends 10
Foreign source dividends 15
Interest earned by individuals, excluding those subject to real or simplified regime 30

The net taxable revenue is determined by the gross amount of the financial instrument revenue less bank charges and account carrying charges.

Capital gains on financial instruments

The individual income tax is levied on capital gains derived from the sales of shares, bonds, and other similar financial instruments at the following rates:

Nature of capital gain     Tax rate (%)
Capital gains derived from the sale of listed shares 15
Capital gains derived from the sale of non-listed shares 20
Capital gains derived from the sale of bonds 20

The net capital gain is the difference between:

  • selling price decreased by the expenses engaged for the sale of the financial instruments (brokerage fees) and
  • acquisition price increased by the expenses engaged for the acquisition of the financial instruments.

Concerning bonds, the selling and acquisition prices correspond to the capital amount, excluding interest receivable but not yet due.

Last Reviewed - 22 February 2019

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