MOROCCO Law and Practice Contributed by: Loris Marghieri, Dounia El Aissaoui, Julien Nouchi and Mounia Larhrissi, Gide Loyrette Nouel
ue. To claim renewal, a tenant must occupy the premises for two consecutive years or pay key money. For leases exceeding ten years, the tax adminis - tration applies the following registration duties at a rate of 6% on the following tax basis: • For leases between ten and 20 years: Total rent for the specified period plus charges. • For leases of 20+ years or unlimited duration: 20 times the annual rent plus charges. For standard leases, a fixed MAD200 registration fee applies. Work and Repairs The parties are free to allocate the various types of work and repairs. However, in general, ordi - nary repairs and maintenance are borne by the tenant, and the landlord bears the cost of structural and major repairs, as well as repairs resulting from wear and tear, force majeure and construction defects. Frequency of Rent Payments The parties are free to negotiate the frequency of rent payments. Rent for commercial premises is usually payable monthly or quarterly in advance. 6.5 Rent Variation Moroccan regulations allow tenants and own - ers to set rent, revision terms and adjustment rates freely. However, Law No 07-03 limits rent increases for residential, professional, commer - cial, industrial and craft leases. • No rent increase within the first three years of the lease or since the last judicial/contractual review. • Increase caps: 8% for residential leases, 10% for others.
If no revision terms are agreed upon, either party may request judicial review based on these lim - its. 6.6 Determination of New Rent Law No 07-03 provides that a rent increase may only apply every three years following the sign - ing of the lease agreement or the date of the pre - vious judicial or contractual rent review, provided that any such increase is limited as follows: • for residential leases – an 8% increase in the current rent; or • for other leases – a 10% increase in the cur - rent rent. 6.7 Payment of VAT VAT is payable at 20% on rent in the following cases (otherwise it is generally out of scope of Moroccan VAT): • Taxable rental transactions: (a) rental of furnished premises; (b) rental of equipped premises for business purposes; (c) rental of non-equipped premises for busi - ness purposes when they were acquired within the scope of VAT; and (d) rental of non-equipped premises for business purposes in which an intangible asset of the business is included; and (e) rental of premises in commercial com - plexes ( “shopping malls” ). • Rental transactions not subject to Moroccan VAT: (a) non equipped premises which were pur - chased out of scope of VAT. If VAT is not applicable, the landlord can opt to pay 20% VAT, enabling VAT deduction on rental- related expenses. This requires a formal request and may apply – globally or partially – to a spe -
718 CHAMBERS.COM
Powered by FlippingBook