Corporate - Significant developments

Last reviewed - 02 September 2021

Limitations of the preferential tax regime for companies with CFC status

Since the 2020 finance act, the service-oriented companies with CFC status benefit from:

  • A total exemption from corporate tax for the first 5 consecutive fiscal years, starting from the first year in which the status is granted, and taxation at the specific rate of 15% after this period.
  • A permanent exemption from the WHT on dividends and other income from participating interests paid, made available, or recorded in accounts by companies with CFC status, whether paid to a resident or non-resident beneficiaries.

The Finance Act 2021 excludes some financial companies from the CFC tax regime. This exclusion concerns credit institutions, insurance, and reinsurance companies, and insurance and reinsurance trading companies.

Companies having obtained the "Casablanca Finance City" status before 01.01.2020 might continue to benefit from the tax regime in force before this date until 31/12/2022.

Social solidarity contribution

A social solidarity contribution (SSC) was introduced by the Finance Act 2021. It is applicable for the year 2021 and it concerns:

  • Companies excluding companies permanently exempt, companies operating in industrial acceleration zones, and companies with CFC status
  • Individuals earning professional income
  • Individuals earning taxable agricultural income
  • Individuals earning salary income
  • Individuals earning rental income

SSC calculation method and applicable rates for companies

For companies, the social solidarity contribution is calculated on the net taxable profit of the previous FY exceeding MAD1 million, according to the following proportional rates:

Net Taxable income

SSC rate

Between MAD 1m and MAD 5 m


Between MAD 5m and MAD 40m  


Higher than MAD 40m


Transfer pricing documentation

The finance act 2021 has supplemented the provisions relating to transfer pricing documentation by requiring the submission of transfer pricing documentation during a tax audit. This obligation concerns companies that carry out transactions with foreign affiliates which meet the following conditions:

-Their turnover higher or equal to 50 million dirhams.

- The value of their gross assets equals or exceeds MAD 50 million dirhams.

The said documentation includes:

  • A master file containing information relating to all the activities of the related enterprises, the transfer pricing policy applied and the distribution of profits and activities on a global scale and
  • A local file containing information specific to the transactions that the audited enterprise carries out with non-arm's length enterprises.

The 2021 finance law has also introduced a fine applicable to taxpayers who do not comply with this obligation. The fine is 0.5% of the amount of the audited transactions without being lower than 200,000 MAD per year.

The terms and conditions for the application of these measures will be determined by a decree.

Exemption of registration duties on some operations

The finance act 2021 grants an exemption from registration fees for:

  • Deeds establishing advances on current accounts;
  • Deeds relating to bonds and recognitions of debt relating to credit institutions and assimilated organizations.

The formality of registration with the mention free of charge is required for exempted acts.

The 2021 finance act has also reduced from 1% to 0.5% the registration fees for:

  • The incorporation and capital increase of companies or economic interest groups, realised through new contributions, purely and simply, with the exception of liabilities which are subject to transfer taxes.
  • Capital increases by incorporation of capital gains from the revaluation of company assets, in the event of company mergers.

Cancellation of fines, penalties and surchages

Penalties, fines, surcharges and recovery expenses that were subject to collection before the 01.01.20 in addition to the principal and remained unpaid as of 31.12.20 benefit from a total cancellation under the condition that the taxpayers pay the principal before 01.07.2021.

Penalties, fines, surcharges and recovery expenses that were subject to collection before the 01.01.20 only for such fines, penalties, surcharges and collection costs benefit from a 50% reduction under the condition that the 50% is paid before the 01.07.2021.

CIT exemption of the sale of public institutions' shares

The Finance Act for 2021 has provided for the exemption of proceeds from the sale of shares held by public institutions and enterprises and their subsidiaries, made in the context of transfers provided for by the law authorizing the transfer of public enterprises to the private sector.

Such provision applies to transfers realised starting from January 1st, 2021.