Companies in Morocco need to follow specific tax rules when they submit their corporate tax returns. This guide explains all the necessary steps to file corporate taxes in Morocco.
Understand corporate income tax obligations
Every business operating in Morocco including foreign subsidiaries must pay Corporate Income Tax (CIT) on their local profits. The basic Corporate Income Tax stands at 31% for businesses operating in Morocco. Special sector groups and lower-earning taxpayers qualify for tax rate reductions. Under this scheme, small and medium-sized enterprises (SMEs) pay just 15% corporate income tax on their first MAD 300,000 of profits.
Maintain accurate financial records
Follow Moroccan accounting standards when maintaining financial records under GAAP rules. Companies should keep a daybook and general ledger system that shows every financial transaction accurately. Make complete financial statements including balance sheet, income and cash flow reports to validate your tax forms.
Determine taxable income
To determine your company’s taxable income subtract all allowed expenses from your total earnings. Companies can deduct their operational expenses that directly support their business work.
Complete the tax return forms
You must get the “Déclaration de Résultats” document and fill it out properly to submit your corporate income data. This official document needs you to enter all your business income, spending, and valid expense reductions.
Submit the tax return
You need to deliver your tax return to the authorities before the end of three months after your fiscal year ends. Companies that operate on a calendar year basis must send their tax returns by March 31. Send your filled-out tax return plus the required documents to the Moroccan tax administration named Direction Générale des Impôts (DGI).
General regime
Morocco uses taxes that directly affect income and taxes charged at the point of sale. Tax income from indirect taxes exceeds what direct taxes generate. Moroccan businesses need to pay corporate tax which the country calls impôt sur les sociétés or IS.
Corporate income tax
The term corporation applies to all business forms with limited liability including limited liability companies, and shares of limited partnerships. Business and general partnerships with one corporate entity partner, civil companies, foreign corporation branches, profit-driven public sector firms, and business-oriented joint ventures. Partnerships that consist entirely of individuals can make a tax election to pay corporate tax rates. A joint venture made up of only private investors must follow the same rules as well.
Your business will meet tax requirements and help Morocco grow by following these procedures and staying in touch with tax authorities. Morocco uses a tax system based on activities that take place within its borders. Both Moroccan and foreign businesses must pay corporate tax only on their Moroccan business income. Foreign companies must pay taxes on their Morocco income when they have a permanent business location or are treated as having one in Morocco. The law considers a company resident in Morocco when its activities happen there or when its highest decision-making operations take place within Moroccan borders. A company commonly uses the calendar year as its fiscal year yet it has the choice to pick a different period. Companies must submit their income tax accounts to the authorities within three months after their accounting period ends. A business pays corporate tax through four equal payments based on its recent tax results. The company must correct the payable amount during the three months after the accounting year closes.
Each year on 1 April foreign companies who chose the 8% default tax need to submit their business income records.
Value added tax
Value Added Tax (VAT) operates throughout the entire supply chain as a non-stacking tax. Suppliers must include Value Added Tax onto their total selling price for all their products. When the buyer must pay VAT also the seller can deduct input VAT from their output VAT payments. A 20% VAT tax applies to every seller of goods and services who meets the standard requirements unless they qualify for different rates or exemption status. The government applies a 10% VAT discount to services including banking services and leasing agreements as well as for utilities like gas, water and electricity. VAT privileges come in two different forms of relief. Under this tax treatment, the government considers exports of agricultural materials and equipment as well as fishing tools to be exempt from tax like zero-rated items. The second exemption method prevents sellers from claiming VAT input credit on their tax payments. Food basics products do not need to pay VAT taxes under this exception.
Business tax
Business taxes apply to regular business operations of Moroccan people and companies who work in the country. The business tax applies to business property rental value (owned or leased) with a yearly limit of MAD 50 million after VAT deduction. Business activities enjoy tax exemptions during their first five years while companies must pay tax of 10% to 30%.
Customs duties
People and businesses can import all available products and services without restrictions. Certain products that hurt national production need specific import permits for entry. EU products did not need to pay import duty starting from March 2012. Business owners examine vehicles as well as home goods while inspecting products needed by local manufacturers. The tax rates decrease for items that come into our country from other parts of the globe.
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