MOROCCO Law and Practice Contributed by: Loris Marghieri, Dounia El Aissaoui, Julien Nouchi and Mounia Larhrissi, Gide Loyrette Nouel
income and capital gains earned by foreign investors on Moroccan property are subject to Moroccan income or corporate tax. Without a tax treaty, taxation in Morocco applies, potentially leading to double taxation. In both cases, rental income and capital gains from Moroccan properties are generally taxed under Legal entities subject to corporate income tax can deduct amortisation on real estate, exclud - ing land value, based on authorised rates set by industry practices and tax administration guide - lines. The recommended tax deduction rates are 4% for residential and commercial buildings and 5% for permanently constructed industrial build - ings. Furthermore, the main new innovation in real estate ownership is the setting-up of Moroccan REITs (OPCIs), which enjoy the following tax incentives: • Regarding the OPCIs’ upfront capital invest - ment: (a) a deferral from the tax on capital gains (either individual or corporate income tax) on in-kind contributions of real estate properties for all OPCIs created; (b) taxes on capital gains are paid on the sale of all or part of the OPCI shares; (c) an exemption from registration duties to the tax administration; and (d) 1.5% for registration fees with the Land Registry remain payable. • Regarding the taxation of the OPCIs: (a) an exemption from corporate income tax; and (b) an exemption from taxes on dividend and interests. standard conditions. 8.5 Tax Benefits
• Regarding the taxation of shareholders: (a) corporate income tax at the standard rate; (b) taxes on dividends received by individu - als at a rate of 13.75% (from 2023, the rates will change each year until 2026, when the rate will be 10%); (c) taxes on dividends received by non- residents at a rate of 13.75% (from 2023, the rates will change each year until 2026, when the rate will be 10%); (d) capital gains tax for individuals at a rate of 20%; (e) capital gains tax for companies at the standard rate; and (f) an exemption from registration duties to the tax administration. An OPCI may obtain a total exemption from cor - porate income tax (rental income, capital gain, dividend) if it meets the following conditions: • assessment is made by an auditor; • it holds the assets for a minimum of ten years from the date of contribution; and • it distributes: (a) at least 85% of the result of the fiscal year relating to the leasing of buildings built for residential or professional use; (b) 100% of the dividends and shares re - ceived; (c) 100% of the fixed investment revenues received; and (d) a minimum of 60% of the capital gains on the sale of securities.
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