On October 19, 2024, Morocco's Ministry of Finance presented the Finance Law for 2025, which was officially enacted as Finance Law No. 60-24. Following changes impacting Income Tax (IR) are effective from 1st January 2025, as outlined below:
Updated Tax slabs:
| Annual taxable income (in dirhams) | Rate (%) |
|---|---|
| Up to 40,000 | Exemption |
| 40,001 to 60,000 | 10% |
| 60,001 to 80,000 | 20% |
| 80,001 to 100,000 | 30% |
| 100,001 to 180,000 | 34% |
| More than 180,000 | 37% |
Previous slab rate:
| Annual taxable income (in dirhams) | Rate (%) |
|---|---|
| Up to 30,000 | Exempted |
| 30,001 to 50,000 | 10% |
| 50,001 to 60,000 | 20% |
| 60,001 to 80,000 | 30% |
| 80,001 to 180,000 | 34% |
| More than 180,000 | 38% |
- The exemption threshold for the income tax bracket has been raised from 30,000 to 40,000 dirhams.
- The maximum marginal tax rate has been slightly reduced from 38% to 37%
Increase in the amount of the tax reduction for family expenses:
The deduction for family expenses has been increased from 360 MAD to 500 MAD. Also, the limit of maximum allowable deduction has been increased from 2,160 MAD to 3,000 MAD. This will impact the taxable income of the taxpayer.
Important Exemptions to note:
- Supplementary pensions and life insurance or capitalisation benefits, for which the contract duration is at least eight years and for which the contributions have not been deducted from the taxable net income, will be exempt from income tax (IR). In the event of the death or disability of the insured, the duration of the contract will not be taken into account.
- The internship allowance paid by private sector companies to an intern for a period of twelve months will be exempt from IR with a cap limit of 6000 MAD. In the event of recruitment of the intern as a permanent intern, the gross monthly salary capped at 10,000 MAD will also be exempt from IR for twelve months.
- Salary and similar income paid by FIFA representations in Morocco to their non-Moroccan staff will be exempt from income tax.
- Tax exemption for restaurant vouchers – Food expenses provided by employers to employees are exempt up to 40 dirhams per employee per working day, compared to the previous limit of 30 dirhams
- Exemption from retirement pensions and life annuities paid under basic retirement schemes:
- Full exemption from income tax (IR) starting January 1, 2026, along with the removal of the requirement to submit the annual income tax return for individuals receiving only these exempted pensions and life annuities
- As a transitional measure, a 50% reduction in the tax due on these incomes will apply for the year 2025.
Withholding tax for property income:
- Taxpayers with property income subject to withholding tax may opt for the flat-rate of 20% replacing the current withholding rates of 10% or 15%. and will be exempt from the annual income declaration.
B. Statutory Compliance Release Date: December 19, 2024
C. Effective Date: January 1, 2025
Maroc LF 2025.pdf
A. Update
As per Finance Law No. 22.50 (‘the Law’) announced on 30 Dec 2023, following changes mentioned below are effective from January 2023.
1) Revision in professional expenses for salaried income earners:
- Employees can claim 35% of the taxable income as professional expenses, if their gross annual taxable income is ≤ 78,000 MAD
- However, if the gross taxable income is >78,000 MAD, the professional expenses can be claimed up to 25% of the taxable income
The above professional expense deduction shall be subject to a ceiling of 35,000 MAD.
Prior to this amendment, the professional expenses could be claimed up to 20% of the taxable income, subject to a maximum ceiling of 30,000 MAD.
2) Extension of the IR exemption period for newly recruited employees
As per the Article 57-20° of the Law, the employer is not required to withhold income tax from the employee’s salary provided the following conditions are met:
- The employee is working for a company, association or cooperative which got incorporated during the period from January 1, 2015, to December 31, 2026, and employed up to a maximum of 10 employees
- The recruitment must have been made within the first 2 years from the date of incorporation of the company, association, or cooperative.
- The employee must have been recruited under a permanent employment contract.
- The monthly gross salary is capped at 10,000 MAD, for a period of 24 months from the date of recruitment of the employee.
The period has been extended from December 31, 2022, to December 31, 2026 to encourage and support employment and improve the competitiveness of companies.
3) Extension of the IR exemption period for recruited employees under open-ended employment contract:
As per the Article 247-XXXIII of the Law, the employees are exempted from Income tax (IR) for first 36 months from the date of recruitment mentioned in their permanent employment contract. The exemption is provided to the employees under following conditions:
- Contract should be concluded during the period from 1 January 2021 to 31 December 2026, before this change in Article 247-XXXIII, IR is exempted from 1 January 2021 to 31 December 2022.
- This is the first employment of the employee
- The age of the employee must not exceed 35 years as on the date of conclusion of the employment contract
4) Ceiling amount set to exempt from IR
Following allowances are exempted from income tax if the total amount of these exemptions does not exceed one million 1,000,000 MAD:
- The dismissal indemnity
- The voluntary departure indemnity
- And any indemnity for damages" granted in case of dismissal.
B. Statutory Compliance Release Date: December 30, 2022
C. Effective Date: January 1, 2023
A. Update
The Ministry of Economy and Finance, Morocco, has enacted the Finance Bill No. 76-21 for the fiscal year 2022. The changes have been introduced in Article 267, wherein it specifies that Social Solidarity Contribution of 1.5% shall now be applicable only to
- Companies subject to corporate income tax
- Individuals with income defined in article 30 (1 and 2) i.e., professional income and article 46 i.e., agricultural income of the Finance Act.
Therefore, the social solidarity tax in no longer applicable to natural persons with salary and similar income.
B. Statutory Compliance Release Date: December 20, 2021
C. Effective Date: January 01, 2022
A. Update
The Ministry of Economy and Finance, announced the Budget for Year 2021 and the same was enacted as a law vide Decree No. 1-20-90. The key amendments related to employer obligations are summarised below:
1. Introduction of Social Solidarity Contribution (SSC) for the year 2021:
- Employer shall withhold SSC at the rate of 1.5% of SSC Base for an employee, whose SSC Base is more than or equal to MAD 240,000 for a year. The SSC Base is computed as follows: SSC Base = Gross income – Compulsory social contributions - income tax payable.
- Employers must electronically submit annual declaration for SSC on or according to a model form established by the administration. Such model has not yet been established by the administration.
2. Exemption to employees who involuntarily lost job during COVID-19 pandemic
Paragraph V has been inserted to Article 247bis of the General Tax Code (CGI), which provides for exemption of the gross monthly salary from income tax for a period of 12 months from the date of recruitment.
The above exemption is applicable only for the employees who satisfies all the below conditions:
- The employee must be recruited during the year 2021.
- his gross monthly salary for the employee is less than or equal to MAD 10,000.
- who involuntarily lost his job during the period from 1st March 2020 to 30th September 2020 for economic reasons related to the repercussions of the COVID-19.
- the employee must have benefited from the job loss fund in accordance with the provisions of Law No. 03-14 amending and supplementing the Decree on Law No. 1-72184 of 15 Jumada II 1392 (July 27, 1972) relating to the social Security.
The employer should review required documents to ensure that the above conditions are satisfied before such exemption is provided to the employees. Also, it is important to note that the employee cannot take the benefit twice.
In addition, it should be noted that employers must produce a yearly declaration including the list of employees benefiting from such exemption in accordance with the provisions of article 79-V of the CGI. The declaration format is not yet released by the authorities.
3. Income tax exemption on salaries of newly hired employees
Paragraph XXXIII has been inserted to Article 247 of the General Tax Code (CGI), which provides for income tax exemption from the salary received by an employee during the first 36 months from the date of the indefinite duration (‘Permanent’) employment contract.
This exemption is granted only if all the following conditions are satisfied:
- This should be the first employment of the employee.
- the employee must be recruited under a permanent employment contract.
- such contract should be concluded during the period from 1 January 2021 to 31 December 2021.
- the employee's age must not exceed 35 years on the date of conclusion of such employment contract.
To avail the above exemption, the employee must submit required documents to his employer, to prove that he has never been previously identified as an insured with the CNSS by any employer and this is his first employment.
Employers must produce a yearly declaration including the list of employees benefiting from the aforementioned exemption in accordance with the provisions of article 79-V of the CGI. The declaration format is not yet released by the authorities.
