MOROCCO Law and Practice Contributed by: Loris Marghieri, Dounia El Aissaoui and Julien Nouchi, Gide Loyrette Nouel
8.2 Mitigation of Tax Liability The acquisition of large real estate portfolios has the same tax consequences as the purchase of a single real estate asset: if the transaction involves the direct purchase of real estate, it is subject to registration fees and property regis - tration (see 2.10 Taxes Applicable to a Trans- action ). However, in order to minimise the tax cost, it might be possible to acquire shares in a compa - ny that does not qualify as a real estate company (ie, that does not have gross assets composed of at least 50% real estate properties/other real estate companies). In that case, the transaction would be free of registration duties and no prop - erty registration fee would be payable (see 2.10 Taxes Applicable to a Transaction ). 8.3 Municipal Taxes When renting out commercial or industrial prem - ises, tenants are liable for two main local taxes: business tax and tax on municipal services. Business Tax Pursuant to Article 6-II-1° of Law No 47-06 on local taxation, all newly created professional activities benefit from a total exemption of busi - ness tax for the first five years after starting their activity. Business premises benefit from this exemption. The taxable basis for business tax is the gross yearly rental value of all the assets available to the company (including assets purchased and rented). Newly incorporated companies benefit from a five-year business tax exemption, regard - less of their legal purpose. For hotel/housing activities, the taxable basis is determined by multiplying the construction/
building cost with the following proportional rates: • 2% if the construction cost is lower than MAD3 million; • 1.5% if the construction cost is equal to or higher than MAD3 million and less than MAD6 million; • 1.25% the construction cost is equal to or higher than MAD6 million and less than MAD12 million; and • 1% if the construction cost is equal to or exceeds MAD12 million. Companies that do not own the premises they occupy must also include the amount of rent paid to the owner for all types of leases (real estate, leasing, etc) in the taxable basis. The applicable rate is based on the nature of the activity and ranges from 10% to 30%, applicable on the annual rental value of assets used for the activity. Tax on Municipal Services The taxable basis for the tax on municipal ser - vices is determined with reference to the rules applicable to business tax. In principle, the municipal tax services taxable basis is identical to the business tax taxable basis (the taxable basis is reported in the same return for both taxes). There is no exemption for the start of the activity regarding this tax (ie, it is payable as from the first year of activity). The tax rate for the municipal services tax dif - fers according to the geographical location of the activity, as follows:
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