MOROCCO Law and Practice Contributed by: Loris Marghieri, Dounia El Aissaoui and Julien Nouchi, Gide Loyrette Nouel
• 10.5% for properties located within the scope of urban municipalities, delineated centres and summer, winter and spa resorts; and • 6.5% for properties located in outlying areas of urban municipalities. Companies that do not use the properties they own are not liable for the business and municipal taxes on such properties; instead, the tenant is subject to the taxes relating to these properties. 8.4 Income Tax Withholding for Foreign Investors The applicable regime is based on the distinction between companies and individuals. Companies According to the MTC, foreign investors own - ing property in Morocco are subject to corporate income tax on revenues deriving from that prop - erty (depending on the provisions of any double taxation treaty that may govern taxation, but generally capital gains on real estate are taxed in the country where the property is located). The corporate income tax rates detailed in 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity apply for 2024, 2025 and 2026 before reaching a flat rate of 20%, depending on the taxable income (ie, mainly the capital gain generated by the sale of a real estate property located in Morocco and made by a foreign investor). Individuals The real estate rental income of individuals is subject to the following proportional rates: • lower than MAD120,000 – 10%; and • more than MAD120,000 – 15%.
If a professional (either a company or an indi - vidual) pays a rental/real estate income (public or private legal entities or individuals), this pro - fessional is required to withhold the personal income tax on behalf of the real estate owner. The tax withheld is equal to 10% of the monthly gross rent payable if the yearly rent is lower than MAD120,000, otherwise the rate is 15%. Capital gains on real estate properties are sub - ject to personal income tax at the rate of 20%. In the case of a capital loss (ie, sale price of a prop - erty lower than its purchase price), the minimum tax payable amounts to 3% of the sale price. Exemption The following is exempt from personal income tax: capital gains made by anyone who, during the calendar year, transfers buildings with a total sale price up to MAD140,000. Double Tax Treaties Double tax treaties entered into by Morocco generally provide that income/capital gains from immovable property may be taxed only in the contracting state in which the property is located. Thus, the domestic treatment provided by the MTC is generally confirmed and the rental income received or capital gain carried out by a foreign investor (on a property located in Moroc - co) will be subject to (corporate) income tax in Morocco. In the absence of a tax treaty, taxation will gener - ally be applicable in Morocco and may generate a situation of double taxation. Hence, in both cases (existence of a tax treaty or not), rental income and capital gain deriving from
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