Tax changes introduced by the 2025 Finance Law

Below is a summary of the main tax measures introduced by the 2025 Finance Law; ;

I. Income Tax (IR)

1. Reform of the progressive scale :
   • Increase in the exemption from 30,000 to 40,000 dirhams (exemption for salaries under 6,000 dirhams) also applicable to the withholding tax threshold for property income
   • Revision of the scale as detailed below.
   • Applicable from January 1, 2025. 
     

     Income brackets in dirhams (Before Finance Law 2025)	Rates (Before Finance Law 2025)	Amounts to be deducted (Before Finance Law 2025)	Income brackets in dirhams (After Finance Law 2025)	Rates (After Finance Law 2025)	Amounts to be deducted (After LF 2025)
     0 to 30,000	0%	0	0 to 40,000	0%	0
     30,001 to 50,000	10%	3000	40,001 to 60,000	10%	4000
     50,001 to 60,000	20%	8000	60,001 to 80,000	20%	10000
     60,001 to 80,000	30%	14000	80,001 to 100,000	30%	18000
     80,001 to 180,000	34%	17200	100,001 to 180,000	34%	22000
     Over 180,000	38%	24400	Over 180,000	37%	27400

2. Benefits for internships and recruitment :
   • Income tax exemption conditions extended to all trainees (max 6000 dh/month)
   • Exemption for internships limited to 12 months instead of 24 months.
   • Exemption for 24 months if trainees are recruited on permanent contracts (capped at 10,000 dirhams/month).
   • Applicable from January 1, 2025.
3. New tax categories :
   • Express addition of income categories such as unjustified income discovered during tax audits, winnings from foreign online gambling, and miscellaneous income from lucrative activities not classified in existing tax categories. 
   • Withholding tax of 30% and social solidarity contribution on gambling winnings
   • Applicable from January 1, 2025 & July 1, 2025
4. Revision of the tax treatment of buybacks of supplementary pensions:
   • Exemption subject to a minimum duration of 8 years for contracts.
   • Clarification of the taxable base for buybacks before this deadline.
   • This requirement is excluded in the event of death or disability.
   • Applicable from January 1, 2025.
5. Clarification of the tax treatment of property transfers:
   • Taxation of capital gains on land transfers at a value exceeding the acquisition price.
   • Exclusion from income tax for transfers made at their original acquisition price.
   • Applicable from the January 1, 2025.
6. Eligibility of contributions of shares and equity interests:
   • Confirmation that contributions of shares in unlisted real estate-focused companies are eligible for the tax payment deferral scheme.
   • Applicable according to article 161 bis-II of the CGI.
7. Taxation of land profits related to expropriation:
   • Clarification of the taxation of land profits realized during expropriations or judicial transfers.
   • Withholding tax is mandatory for these amounts, with the possibility of deducting it from the income tax due.
   • Applicable from July 1, 2025.
8. Land income :
   • Option for a final tax payment of 20% instead of withholdings of 10% or 15% with obligations to declare global income.
9. Retirement pensions 
   • Income tax exemption for retirement pensions and life annuities from January 1, 2026 for basic pension schemes.
   • Annual declaration exemption for beneficiaries of these tax-exempt pensions.
   • Transitional reduction of 50% of the IR for pensions and annuities received in 2025.
   • Supplementary schemes remain subject to income tax according to the usual rules.
10. Other changes:
    • Increase in the income tax reduction for family expenses from 360 to 500 dirhams per dependent (maximum of 3000 dh)
    • The increase in the amount of vouchers representing food or meal expenses issued by employers to their employees to 40 dirhams instead of 30 dh per day worked.

II. Corporate Income Tax (CIT)

1. Vehicle depreciation :
   • Increase in the deduction limit for passenger transport vehicles 300,000 to 400,000 dirhams, amortizable over 5 years.
   • Applicable from 1 January 2025.
2. Restructuring of corporate groups :
   • Reduced detention threshold 80% at 2/3 for parent companies.
   • Net capital gains benefit from a payment deferral instead of a postponement.
   • Possibility of transferring fixed assets to net book value in exchange for securities
   • Applicable to transfers made from 1 January 2025.
3. Joint ventures (SEP) & Economic Interest Groups (EIGs) :
   • Corporate income tax liability is mandatory for SEPs with more than 5 partners or including a legal entity.
   • Integration of GIEs into the field of IS with distribution of results between members.
   • SEPs not subject to corporate income tax must keep accounts.
   • Applicable to financial years beginning on or after January 1, 2026 for SEP.
   • Applicable from 1 January 2025 for GIEs.
4. Revision of the application procedures for withholding tax on income from shares, equity interests and similar income:
   • Amendment to the provisions of Article 247-XXXVII-C of the French General Tax Code (CGI) to provide for the application of withholding tax to the proceeds from shares, equity interests and similar income distributed, as follows:
     • 12,50%, for amounts distributed from 1 January 2025 onwards; ;
     • 11,25%, for amounts distributed from 1 January 2026 onwards; ;
     • 10%, for amounts distributed from 1 January 2027.
5. Extension and Expansion of the Capital Gains Tax Allowance on Real Estate 
   • Tax relief of 70% on capital gains from real estate:
   • Extension of the tax relief until December 31, 2030.
   • Extension to land and building sales from 2025.
   • Subject to the reinvestment of proceeds from disposal in accordance with article 247-XXXV of the CGI.
   • Applicable to companies subject to corporation tax.

III. Value Added Tax (VAT)

1. Removal of VAT application for occasional customers residing in Morocco.
   • Removal of the application of VAT to remote service supplies for occasional customers residing in Morocco.
   • Definition of clear criteria for establishing tax residency in Morocco.
   • Transition to quarterly reporting for non-resident service providers.
2.  Exemption for capital goods used in private education:
   • Extension of VAT exemption to assets acquired by real estate companies and OPCIs for educational projects.
   • Subject to compliance with regulatory formalities and the obligation to preserve assets.
   • Applicable to companies and OPCIs that have not exceeded the 36-month exemption period before January 1, 2025.
3. Taxation of dried yeasts subject to VAT:
   • Application of a VAT rate of 20% domestically and on imports to ensure fair competition between local and imported products.
   • Transitional measures for VAT on stocks prior to January 1, 2025 and transmission of a list of debtor customers as of December 31, 2024 for taxpayers concerned by the cash basis system.
4. Seasoned meats :
   • Extension of VAT exemption to seasoned fresh or frozen meats.
5. Increase in local resources :
   • Minimum share of VAT allocated to local authorities increased by 30% to 32%.
6.  Temporary exemption from VAT on the importation of certain products:
   • Application of VAT exemption on the importation of live animals, fresh or frozen meat, cargo rice and virgin and extra virgin quality olive oils.
   • Measure applicable from January 1, 2025 to December 31, 2025, within the limits of the quotas set.

IV. Registration fees

1.  Clarification of long-term leases:
   • Replacement of the term "emphyteutic lease" with "lease with a duration exceeding 10 years".
   • Revision of the taxable base for leases exceeding 10 years.
   • Total annual rent plus charges (maximum of 20 years)
   • Applicable from January 1, 2025.
2.  Penalties for electronic recording:
   • Targeted professionals (notaries, adouls, chartered accountants and certified public accountants)
   • A fine of 1000 dirhams for omission or error in electronic registration.
   • Correction possible within 30 days without penalty.
   • Applicable from January 1, 2025.
3.  Transmission of electronic documents:
   • Notaries are required to transmit documents with electronic signatures. .
   • Applicable from January 1, 2025.
4.  Control by land registrars:
   • A certificate of registration must be attached to documents presented to the land registrars.
   • Applicable from January 1, 2025.
5.  Exemption for free transfers to the families of martyrs and wounded soldiers :
   • Exemption from registration fees for gratuitous transfers to their beneficiaries.
   • Applicable from January 1, 2025.
6.  Tax exemption for the establishment of guarantees:
   • Exemption from registration fees for guarantees and mortgages relating to the payment of taxes.
   • Applicable from January 1, 2025.
7. Rights for restructuring groups of companies:
   • Setting a registration fee of 1000 dirhams for transfers and contributions related to restructurings.
   • Applicable from January 1, 2025.

V. Special annual tax on vehicles

1. Extension of payment deadlines :
   • Extension of 30 to 60 days for vehicles put into circulation during the year.

VI. Common Measures

1. FIFA Representation in Morocco :
   • Tax exemptions (corporate tax, income tax, VAT, registration fees, etc.) for activities related to FIFA and its affiliates.
2. Extension of tax incentives :
   • Reduction of 70% on capital gains from the sale of fixed assets extended until 2030.
3. Codification of the tax on cement :
   • Integration into the CGI for simplification and better management.
4. Amicable agreements :
   • A clarified legal framework for agreements between tax authorities and taxpayers.
5. Electronic notification :
   • Validation of electronic notifications as equivalent to traditional notifications.
6. Local Taxation Commissions :
   • Expanding the scope of responsibilities to include new income categories.

 

Useful links and reference documents:

🔗General Tax Code (CGI) 2025

🔗Summary note published by the DGI, summarizing the main tax provisions of the 2025 finance law.