Morocco

Individual - Significant developments

Last reviewed - 02 September 2021

Exemption from payroll tax

Salaries paid by any company, cooperative or association, regardless of the date of its creation, to an employee on the occasion of his or her first recruitment are exempt from income tax for the first 36 months following said recruitment, under the following conditions:

- the employee must be recruited under an employment contract of indefinite duration

- the employee should be hired between 01/01/2021 and 31/12/2021;

- the age of the employee must not exceed 35 years on the date of recruitment

A provision of the finance act for 2021 exempts from income tax, the gross monthly salary capped at 10,000 MAD paid by a company, an association or a cooperative to an employee who has involuntarily lost his job during the period from 01/03/2020 to 30/09/2020 and this, for 12 months as from the recruitment.

The said provision applies on the following conditions:

  • The employee must be recruited in 2021;
  • The employee must have benefited from the fund for loss of employment.

The circular note specified that the employer must require the new employee to produce any document certifying the loss of employment between 01/03 and 30/09/2020 due to the repercussions of the health crisis and justifying the benefit of the indemnity for loss of employment.

Social solidarity contribution applicable to individuals

The social solidarity contribution (SSC) introduced by the Finance Act 2021 is

applicable for the year 2021 concerns:

  • Individuals earning professional income
  • Individuals earning taxable agricultural income
  • Individuals earning salary income
  • Individuals earning rental income

SSC calculation method and applicable rates for individuals

Concerning individuals, the contribution is calculated on annual Moroccan sourced income after tax which is equal to or greater than MAD 240,000. The applicable rate is 1.5%.

The unique professional contribution

The Finance Act for 2021 introduced a unique professional contribution (UPC) for individuals whose professional income is determined according to the flat-rate profit system.

The UPC  offers the advantage to pay a single tax that includes, on the one hand, taxes and duties of a professional nature, i.e. income tax, business tax and municipal service tax and, on the other hand, a supplement of duty intended for social benefits covering, in the first instance, compulsory health insurance.

Taxpayers whose professional income is determined according to the UPC regime are subject to income tax based on their turnover, to which a coefficient fixed for each profession is applied.

This provision comes into force on January 1, 2021.