Individual - Significant developments

Last reviewed - 04 April 2023

Deduction of expenses inherent to the function or employment

The cap on professional expenses allowed as a deduction from gross annual taxable income is raised from MAD 30,000 to MAD 35,000 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 IIT of the gross monthly salary capped at 10 000 dirhams, for a period of 24 months from the date of recruitment of the employee:

 Within the limit of 10 employees

  • The employee must be recruited within the framework of a permanent contract
  • The recruitment must be carried out within the first 2 years from the date of the beginning of exploitation of the company, the association, or the cooperative

 This measure is applicable to companies, associations and cooperatives created during the period from January 1, 2015, to December 31, 2026.

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

In case of repurchase before the end of the contract, a taxation in terms of IIT (withheld at source) at a rate of 15% (without deferment) for repurchase of contributions and premiums relating to individual or group retirement insurance contracts before the term of 8 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

2023 finance act provides that the following indemnities are exempt from taxation up to a maximum of one million (1,000,000) dirhams:

  • 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 one million (1,000,000) dirhams mentioned above.