Morocco

Deductions

The cap on professional expenses allowed as a deduction from gross annual taxable income is raised from 30,000 to 35,000 Moroccan dirhams (MAD) for individuals whose gross annual taxable income does not exceed MAD 78,000.

This rate is set at 25% for individuals whose gross annual taxable income exceeds MAD 78,000 (up to a limit of MAD 35,000).

The deduction applicable to pensions and life annuities is increased from 60% to 70% on the gross taxable amount not exceeding MAD 168,000.

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.

Repurchase of contributions and premiums relating to individual or group retirement insurance contracts

In case of repurchase before the end of the contract, taxation in terms of IIT (withheld at source) at a rate of 15% (without deferment) is applicable for repurchase of contributions and premiums relating to individual or group retirement insurance contracts before the term of eight years and/or the age of 45 years. 

The tax deducted is chargeable to the global IIT with right to restitution. 

Revision of the taxation of dismissal indemnities

The 2023 Finance Act provides that the following indemnities are exempt from taxation, up to a maximum of MAD 1 million:

• The dismissal indemnity.
• Compensation for voluntary departure.
• Any compensation for damages granted in the event of dismissal.

In case of an accumulation of several indemnities, the total amount of the said indemnities exempted from income tax cannot exceed, in any case, the amount of MAD 1 million mentioned above.