Morocco

Revision of value-added tax (VAT) rates

The 2024 Finance Act introduced a gradual convergence towards two VAT rates (10% and 20%) over the period 2024 through 2026, as follows:

VAT exemptions

The 2026 Finance Bill extended the scope of VAT exemptions to the following items:

With the right to deduct input VAT:

• fertilizers and growing media intended exclusively for agricultural use, subject to compliance with the applicable conditions;
• human and animal blood and its derivatives.

Without the right to deduct input VAT:

• sales (other than on‑site consumption) of short, uncooked, and unfilled pasta products.

Note: The above items also benefit from the VAT exemption when imported.

In addition, the 2026 Finance Bill introduced a temporary VAT exemption on imports of live domestic bovine and camelid animals, applicable from 1 January to 31 December 2026, within quotas of 300,000 head and 10,000 head, respectively.

VAT on digital operations

Finance Law 2024 expanded the scope of VAT to cover digital operations.

Services supplied remotely by a non-resident person with no establishment in Morocco to:

• a customer whose registered office, place of business, or tax domicile is in Morocco, or
• an occasional resident customer

are now subject to VAT.

A service provided remotely in a dematerialised manner is every service rendered via a remote communication tool, including intangible and other immaterial goods.

As part of aligning the provisions for remote services introduced by the 2024 Finance Act with international best practices, the 2025 Finance Act includes the following changes:

• Removing the scope of application for services provided remotely to an occasional resident client in Morocco, as this client will pay VAT on the transaction in their country of habitual residence.
• Defining criteria to establish tax residency in Morocco, to help non-resident companies identify clients covered by Article 115 bis of the Moroccan Tax Code who acquire remote services digitally, by specifying clear indicators similar to those used in other countries.
• Changing the frequency for non-resident remote service providers to file their turnover declarations in Morocco, moving from monthly to quarterly filing through the electronic platform.

Decree No. 2‑25‑862, issued on 27 November 2025, sets out the formalities applicable to non‑resident service providers supplying remote, dematerialized services to non‑VAT‑taxable customers.

Revision of the corporate income tax (CIT) rates

The 2023 Finance Bill fixed the applicable CIT rates as follows:

• 20% for companies with net tax income lower than 100 million Moroccan dirhams (MAD).
• 35% for companies with net tax income equal to or higher than MAD 100 million (subject to some exceptions).

Still, the target rates of 20% and 35% rates will not be applicable until January 2026. As such, CIT rates will progressively evolve, from 2023 to 2026, as follows:

The 2026 Finance Bill introduced a transitional measure under which microfinance institutions incorporated as joint‑stock companies following the transfer of assets and liabilities from microfinance associations are excluded from the 40% corporate income tax (CIT) rate applicable to credit institutions.

CIT exemption 

The 2026 Finance Bill introduced a permanent exemption from WHT on remuneration and similar lease payments relating to the chartering, leasing, and maintenance services of ships used for international maritime transport, where such amounts are paid or credited to non‑resident individuals or legal entities.

Social solidarity contribution (SSC)

The 2026 Finance Bill extended the application of the SSC for corporate profits and professional income for the years 2026, 2027, and 2028.

The contribution is calculated as follows:

• For companies: Based on the same amount of net profit used for the calculation of CIT that is equal to or superior to MAD 1 million for the last closed fiscal year.
• For individuals: Based on the net income made that is equal to or superior to MAD 1 million as of the last closed fiscal year. 

SSC calculation method and applicable rates for companies

For companies, the SSC is calculated on the net taxable profit of the previous fiscal year according to the following proportional rates:

Companies subject to SSC must submit a declaration, by electronic means, according to a model established by the administration within three months following the closing date of the last accounting period. They must pay the amount of the contribution at the same time as the declaration referred to above.

Withholding tax (WHT) on dividends

The 2023 Finance Bill introduced a reform on the WHT rate applicable to income from shares, units, and similar income that extends to 2026. Thus, the target rate of 10% will not be applicable until January 2026. As such, the WHT rate on dividends will progressively evolve, from 2023 to 2026.

In the context of simplifying the progressive application modalities of the WHT on income from shares, social shares, and similar income, the 2025 Finance Bill has amended the provisions of Article 247-XXXVII-C to provide for the application of the WHT on said distributed income as follows:

• 12.50% for amounts distributed from 1 January 2025.
• 11.25% for amounts distributed from 1 January 2026.
• 10% for amounts distributed from 1 January 2027.

These rates apply to income from shares, social shares, and similar income distributed from 1 January 2025, regardless of the fiscal year of their origin.

WHT on remuneration for services rendered by certain legal entities

The 2026 Finance Bill extended the application of WHT for CIT and VAT purposes to remuneration for services rendered by certain taxable legal entities for the benefit of the other legal entities.

The WHT applies where service payments are made by:

• banking institutions and similar entities;
• insurance and reinsurance companies;
• companies whose turnover excluding VAT is equal to or exceeds MAD 200 million, effective as from 1 January 2028.

On a transitional basis, this CIT and VAT WHT will be implemented progressively by companies, based on the turnover excluding VAT on their last closed fiscal year, as follows: 

For VAT purposes, the WHT to be applied to service payments referred to in Article 89‑I (5°, 10° and 12°) of the Moroccan Tax Code (MTC) is set at:

• 75% for suppliers presenting a tax compliance certificate;
• 100% in the absence of such certificate.

Effective date: Applies to remunerations paid as from 1 July 2026.

WHT on real estate rental income for CIT and PIT purposes

The 2026 Finance Bill extended WHT for both (CIT) and (PIT) to rental income paid to companies subject to CIT and to individuals subject to professional PIT under the Net Real Profit or Simplified Net Profit regimes. This includes rental income from built or unbuilt real estate. 

Rental income paid to persons outside the scope of taxation or benefiting from a permanent exemption is excluded.

The WHT applies at a 5% non‑final rate on rental income excluding VAT and is creditable against the final CIT or PIT due, with any excess refundable.

The obligation to withhold applies to public entities, credit institutions, insurance and reinsurance companies, and companies meeting the turnover thresholds set out in the previous section.

Effective date: Applies to rental income paid as from 1 July 2026.

CIT and VAT measures for sports companies

The 2026 Finance Bill introduced specific tax measures applicable to sports companies. 

For CIT: 

• Donations made in cash to sports companies are deductible within the limit of 20% of the donor's net taxable income, capped at MAD 5 million per financial year. 
• Contributions of assets and liabilities from sports associations to sports companies benefit from tax neutrality regime and may be carried out at fair market value without immediate tax consequences. However, upon subsequent disposal, capital gains are computed based on the historical value prior to the contribution. 

For VAT: 

• Extension of the VAT exemption (without the right to deduct input VAT) granted to sports companies for a transitional period from 1 January 2026 to 31 December 2030.