The 2024 Finance Law introduces a series of crucial measures that reshape the tax landscape for Moroccan taxpayers. Discover the implications in this brief summary, which outlines the tax provisions introduced by this law.
I) Value Added Tax (VAT)
1) VAT withholding tax (RAS):
No issues regarding taxable capital goods and works:
⚠️ VAT will now be withheld at source by customers for all suppliers of taxable equipment and works, who do not justify tax regularity by providing a tax regularity certificate issued by the tax administration dated less than 6 months.
Exceptions: Certain public sector entities will be exempt from this withholding obligation.
No issues regarding service delivery:
⚠️ Withholding tax of 75% of the amount of VAT for service providers by clients of public sector entities and for individuals dealing with private sector entities.
⚠️ Withholding tax 100% if there is no tax compliance certificate from suppliers.
Exceptions to the RAS:
Electricity and water distributed publicly.
Sanitation and meter rental.
Telecom operators.
Insurance brokerage agents.
Transactions ≤ 5,000 MAD (limit 50,000 MAD/month/supplier).
VAT credit refund:
Presumably to compensate taxpayers for the impact on their cash flow, the finance law provides for the refund of VAT credits following withholding at source. The operational details and effectiveness of this process remain to be clarified.
2) Other VAT-related measures
Changes to VAT regulations:
| Preservation of Investment Assets |
The law reinstates the obligation to keep investment assets in a fixed asset account for 60 months, under penalty of repayment to the Treasury of the initial benefit. |
| Extension of VAT to Digital Commerce |
The 2024 Finance Law includes in VAT online dematerialized services provided by foreign suppliers to local consumers. |
| Business Leaders' Solidarity on VAT |
The law establishes solidarity for the collection and payment of VAT, involving any person exercising administrative or management functions and any effective beneficiary of unpaid VAT. |
| VAT Reverse Charge Scheme |
This new optional scheme allows entities subject to VAT to calculate this tax on their out-of-scope or exempt purchases, simultaneously allowing them to deduct it. |
| Tax Regime for Real Estate Rentals and Investment Exemptions |
Clarification of VAT rules for the rental of unfurnished premises for professional use and of the conditions for exemption of investment goods, they are subject to VAT when their acquisition or construction has been made with deduction or exemption from this tax. |
Reorganization of VAT Rates:
| Gradual reduction of the rate from 14% to 10%.
12% from January 1, 2024,
10% from January 1, 2025. |
Insurance-related services |
📉 |
| Increases from 7 to 10% |
Water to public networks, sanitation, rental of water meters (excluding certain operations). |
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| Gradual alignment of the VAT rate
16% from January 1, 2024,
18% from January 1, 2025,
20% from January 1, 2026. |
Electricity |
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| Gradual alignment of the VAT rate
11% from January 1, 2024,
15% from January 1, 2025,
20% from January 1, 2026. |
Electricity meter rental |
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| Gradual reduction from 14% to 10%.
12% from January 1, 2024,
10% from January 1, 2025. |
Renewable energy sold by producers: |
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| Gradual increase from 7% to 10%.
8% from January 1, 2024,
9% from January 1, 2025,
10% from January 1, 2026. |
Refined sugar |
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| Increase from 7% to 10%. |
Economy cars |
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| Reduction to 10% over 3 years:
13% from January 1, 2024,
12% from January 1, 2025,
10% from January 1, 2026. |
Urban and road transport of passengers and goods |
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| Increase to 20% over 3 years:
16% from January 1, 2024,
19% from January 1, 2025,
20% from January 1, 2026. |
Other transport (excluding urban and road transport) |
📈 |
VAT exemptions
Everyday Consumer Goods:
With right to deduct: Pharmaceutical products, Domestic water, Sanitation services.
No right to deduct: Butter, Powdered milk, Canned sardines, Household soap, School supplies.
Mohammed VI Foundation:
The Mohammed VI Foundation for Science and Health benefits from a VAT exemption with the right to deduct.
Cooperatives:
Cooperatives offering services related to agriculture benefit from an exemption under regulated conditions.
Operating concessions upon import:
The VAT exemption is established up to the amount of VAT paid on importation for royalties and rights granted.
II) Corporate income tax (CIT)
Clarification of the conditions for reducing the corporate income tax rate from 35% to 20%:
Clarification regarding the conditions for the transition of the Corporate Income Tax rate from 35% to 20%. The application of the reduced rate of 20% is conditional upon maintaining net profit below one hundred million (100,000,000) dirhams for three (3) consecutive fiscal years. However, this rule does not apply if the net profit exceeding the 100 million dirham threshold results from non-recurring operations.
Mohammed VI Foundation for Science and Health
The 2024 Finance Law grants a permanent exemption from Corporate Income Tax (CIT) to the Mohammed VI Foundation for Science and Health for all of its activities, operations and the income derived therefrom.
Donations from taxpayers subject to corporate income tax, whether in cash or in kind, allocated to the Mohammed VI Foundation for Science and Health, are eligible for tax deductibility with regard to Corporate Income Tax.
III) Income Tax (IR)
Deductibility of social security contributions:
The 2024 Finance Law extends the right to deduct social security contributions paid under compulsory health insurance schemes (AMO) to professionals, self-employed workers and non-salaried workers engaged in a liberal activity.
Clarification of the calculation of capital gains from an inherited sale:
In the event of the sale of inherited securities, the acquisition price taken into account is the market value of these securities at the time of the deceased's death, as recorded in the inventory drawn up by the heirs. If this information is unavailable, the taxpayer may declare the market value on the date of the deceased's death, disregarding any joint ownership arrangements or other relevant factors. In the case of an automatic tax assessment, the tax will be based on the sale price, due to the lack of precise information.
Clarification of the calculation of capital gains tax following an inheritance:
Similar to the previous point, the acquisition price of inherited real estate is determined by its market value on the date of the deceased's death, as recorded in the inventory drawn up by the heirs. In the absence of this information, the taxpayer may declare the market value on the date of the deceased's death, without regard to any joint ownership arrangements or other factors.
Flat-rate deduction on artists' fees:
The gross amount of fees paid to artists, whether they work individually or as part of a group, will now be subject to a withholding tax of 30%. However, a flat-rate allowance of 50% will be applied before this withholding.
IV) Common measures
Principle of the right to make mistakes:
The law establishes a mechanism allowing taxpayers to voluntarily correct their tax returns. They can request a statement of any irregularities found from the tax authorities, then file an amended return, pay the additional taxes without penalty, and include an explanatory note detailing the corrections made.
Simplification of the abuse of rights procedure:
To simplify the fight against tax avoidance, the 2024 Finance Law eliminates one level of appeal, maintaining only the national tax appeals commission. Taxpayers can request a preliminary consultation with the tax authorities regarding potentially abusive transactions.
Improvement of the review of the tax situation of individuals:
A simplified adversarial procedure is established to ensure the rights of taxpayers, including the sending of a notice of audit, an oral debate, a maximum audit period of 6 months, and communication of adjustments within 3 months of the closing of the audit.
Clarification regarding the non-accumulation of tax benefits:
The 2024 Finance Law repeals the provisions preventing the accumulation of certain tax advantages, in order to avoid any divergence of interpretation between the tax advantages of common law and those provided for by the investment charter, thus supporting the tax and investment policy.
V) Registration fees
Alignment of rates for acts of allocation of premises or land by cooperatives and associations:
The 2024 Finance Law has established an alignment of registration duty rates for all deeds of allocation of premises and land by cooperatives or associations.
- For constructed premises intended for residential, commercial, professional or administrative use, the rate has increased from 1.5 to 4%.
- As for deeds allocating bare land, the rate has increased from 1.5% to 5%.
- Furthermore, the transfer of the housing to the cooperator after full payment of the subscribed capital will be taxed at 4%.
Exemption from registration fees for the Mohammed VI Foundation for Science and Health:
The 2024 Finance Law exempted registration fees for acts related to the activities and operations of the Mohammed VI Foundation for Health Sciences, created under Law No. 23-23.
Framework for acts subject to registration:
Notaries, officials performing notarial functions, Adouls, Hebrew notaries and any person drafting or contributing to the drafting of a document subject to registration must now comply with two obligations:
- To present a certificate prior to the drafting of any document justifying the payment of taxes and duties related to the property for the year of transfer or sale, as well as for previous years.
- Include the article numbers relating to the housing tax and the municipal services tax in the documents drawn up.
VII) Other tax measures
Code for the recovery of public debts:
The possibility of electronically sending and notifying taxpayers of public debts is introduced. Provisions are amended to allow the Minister of Finance to grant remissions or reductions on late payment interest and penalties.
Discharge contribution for regularization of assets held abroad:
A discharge contribution is introduced for the voluntary regularization of assets held abroad before January 1, 2023. It requires the declaration of assets, their repatriation in foreign currency, and the payment of a discharge contribution varying between 2% and 15% depending on the case.
Voluntary regularization of taxpayers' tax situation:
A special measure is introduced in 2024 allowing for the voluntary regularization of the tax situation of individuals. It concerns taxable profits and income not declared before January 1, 2024, with a contribution set at 5% for undeclared liquid assets and acquired property.
Discharge contribution for check payment incidents:
A discharge contribution of 1.5% is set at the amount of unpaid checks issued before December 31, 2023, allowing the avoidance of penalties related to payment incidents. The maximum amounts are 10,000 dirhams for individuals and 50,000 dirhams for legal entities.
State aid for housing support:
The conditions for receiving state aid for main residences are being revised, notably requiring that the accommodation have at least two rooms and be used as the main residence for at least five years.
Extension of the amnesty for inactive businesses:
The amnesty for inactive companies, introduced by the 2023 Finance Law, is renewed in 2024.
This summary aims to present the reader with the main tax reforms introduced by this law, offering an overview of the major changes in the Moroccan tax landscape for the current year. For a more detailed and comprehensive analysis, please refer to the 2024 Finance Law and other amended laws. Please note that the information provided here does not constitute tax advice. For specialized and specific advice regarding your financial or tax situation, we strongly recommend that you consult a professional. contact us
