MOROCCO Law and Practice Contributed by: Loris Marghieri, Dounia El Aissaoui, Julien Nouchi and Mounia Larhrissi, Gide Loyrette Nouel
The tax rate for the municipal services tax dif - fers according to the geographical location of the activity, as follows: • 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 tax code, foreign investors owning property in Morocco are subject to cor - porate income tax on revenues deriving from that property (depending on the provisions of any double taxation treaty that may govern taxa - tion, 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 income tax base on the general pro -
gressive rates which marginal rate is 37% (for yearly income exceeding MAD180,000), after taking into account a 40% rebate of the taxable basis. If the lessee is a business (company or not), it is required to withhold the income tax on a monthly or quarterly basis based on the following pro - portional rates: • lower than MAD40,000 – withholding tax exemption (which does not mean a tax exemption for the owner); • between MAD40,000 and MAD120,000 – 10%; and • more than MAD120,000 – 15%. The owner must report rental income and pay any tax due, factoring in amounts withheld by the lessee. They may opt for a 20% flat tax instead of progressive rates (up to 37%) with a 40% rebate on the taxable base. Capital gains on real estate are taxed at 20%. If a capital loss occurs (sale price lower than pur - chase price), a minimum tax of 3% of the sale price applies. The sale of a primary residence held for over five years is tax-exempt unless the price exceeds MAD4 million, in which case a 3% minimum tax applies to the excess amount. 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 Morocco’s double tax treaties generally stipulate that income and capital gains from immovable property are taxable only in the country where the property is located. Consequently, rental
724 CHAMBERS.COM
Powered by FlippingBook