Morocco

Revision of Individual Income Tax rates

The 2025 Finance Act introduced the restructuring of the progressive individual income tax rate schedule as follows : 

• Raising the first bracket of the schedule for tax-exempt net income from 30,000 to 40,000 dirhams;
• 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 2025 Finance Act has increased the annual individual income tax reduction for family dependents from 360 to 500 MAD per dependent. As a result, the total amount has been raised from 2,160 to 3,000 MAD, while still allowing the benefit for up to six dependents.

Revision of the conditions for internship allowance exemption

The Finance act of 2025 has introduced the following measures:

• Extending the benefit of the individual income tax exemption to all interns, including non-graduates, for a gross monthly internship allowance capped at 6,000 dirhams;
• Reducing the eligible internship period for this exemption from twenty-four (24) months to twelve (12) months;
• Allowing interns to continue benefiting from the exemption for up to 12 months in case of a change of employer;
• Providing an income tax exemption for a period of twenty-four (24) months if the intern is hired under a permanent employment contract, for a gross monthly salary capped at 10,000 dirhams.

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 individual income tax (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.