Morocco

Revision of Individual Income Tax (IIT) rates

The 2025 Finance Bill introduced the restructuring of the progressive IIT rate schedule as follows: 

• Raising the first bracket of the schedule for tax-exempt net income from 30,000 to 40,000 Moroccan dirhams (MAD).
• Revising the other brackets, resulting in rate reductions of up to 50%.
• Lowering the marginal rate of the schedule from 38% to 37%.

Deductions

The 2026 Finance Bill has increased the annual IIT reduction for family dependants from MAD 500 to MAD 600 per dependant. As a result, the total annual amount has been raised from MAD 3,000 to MAD 3,600, while still allowing the benefit for up to six dependants.

Exemption of new hires

An exemption is granted for salaries paid to newly recruited employees hired between 1 January 2021 and 31 December 2026 for the first 36 months following their hiring date.

The employee must be recruited under an open-ended contract.

The age of the employee must not exceed 35 years at the date of conclusion of the first employment contract.

Newly created entities

Newly created entities benefit from an exemption from IIT of the gross monthly salary, capped at MAD 10,000, for an employee for a period of 24 months from the date of recruitment of the employee.

Please note the following:

• This benefit is limited to ten employees.

• The employee must be recruited within the framework of a permanent contract.
• The recruitment must be carried out within the first two years from the date of the beginning of operation of the company, the association, or the cooperative.
• This measure is applicable to companies, associations, and cooperatives created during the period from 1 January 2015 to 31 December 2026.

Revision of the tax regime applicable to employees of Casablanca Finance City (CFC) status companies 

The 2026 Finance Bill clarified and amended the PIT regime applicable to employees of companies holding Casablanca Finance City (CFC) status. As a result, the 20% flat PIT rate applies to eligible periods of employment, whether continuous or not, for a maximum period of 10 years from the start date, excluding employees of credit institutions and insurance or reinsurance companies.

In addition, employees may opt for taxation under the progressive PIT scale, provided that the option is exercised before 1 February of the relevant year, and may revoke this option under the same conditions.

Companies are also required to report the list of employees benefiting from the 20% flat rate.

PIT relief measures for sports professionals 

The 2026 Finance Bill introduced, on a transitory basis, a regime applicable to employment income paid by sport companies to professional athletes, coaches, educators, and technical stuff. 

The regime provides for a progressive tax allowance on taxable income as follows: 

• 90% applicable for 2026;
• 80% applicable for 2027;
• 70% applicable for 2028;
• 60% applicable for 2029.

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 withholding tax 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.