In Morocco, employers have a responsibility to contribute to the Caisse Nationale de Sécurité Sociale (CNSS), the national social security fund. The contributions are as follows:

CNSS Contributions

• Family Allocation: 6.4% of gross salary
• Social Allocation: 8.98% of gross salary (capped at a monthly salary limit of MAD 6,000)
• Professional Training: 1.6% of gross salary
• Mandatory Medical Care: 4.11% of gross salary

These contributions add up to a total of 20.71% of the employee's gross salary.

Other Employer Taxes

Employers are also subject to a municipal tax levied on the assessed rental value of business property. The rate is 10.5% for urban property and 6.5% for non-urban property.

Key Points to Note

Moroccan employers don't pay a separate payroll tax. Social security contributions and the municipal tax are the primary employer-side tax contributions. Additionally, there is a Social Solidarity Contribution for employers with an annual net profit between 5 million to 40 million MAD at a rate of 2.5%, and those with an annual net profit exceeding 40 million MAD at a rate of 3.5%.

In Morocco, a progressive income tax system is employed. This means that the higher your income, the higher the tax rate applied. It's important to refer to the latest tax brackets published by the Moroccan tax authorities for the current rates.

Social Security Contributions

Social security contributions in Morocco are mandatory and cover schemes managed by the Caisse Nationale de Sécurité Sociale (CNSS). The contributions from the employee's side include:

• Family Allocation (0%)
• Social Allocation: 4.48%
• Professional Training: 1.60%
• Mandatory Medical Care: 2.26%

Deductible Expenses

The Moroccan tax system allows taxpayers to reduce their taxable income with the following deductions:

• Employment Expenses: A standard deduction of 20% of gross salary (up to a limit of MAD 30,000) is available. For individuals whose gross annual taxable income exceeds MAD 78,000, this rate is 25% (up to a limit of MAD 35,000).
• Pension and Life Annuities: 70% of the gross taxable amount not exceeding MAD 168,000.
• Pension Insurance Contributions: There are limits on deductibility.

Other Relevant Taxes

• Professional Tax: A payroll tax at the rate of 1.6% is payable on an employee's gross monthly salary and any contributions made to social security.
• Municipal Tax: This is a tax imposed on the rental value of a property, with rates differing for urban and non-urban properties.

In Morocco, VAT is an indirect consumption tax levied on the supply of goods and services. The standard VAT rate is 20%, with reduced rates of 14%, 10%, and 7% for specific items.

Services Subject to VAT

VAT applies to most services provided within Morocco, including professional services, technical services, transportation services, telecommunication services, hospitality and tourism services, entertainment services, and rental services.

Territoriality: Where is the Service Provided?

The location where a service is considered to be provided is crucial in determining VAT liability. Services consumed or used in Morocco are liable to Moroccan VAT, regardless of the supplier's location. Services exported outside Morocco are generally exempt from VAT.

Taxable Persons

Any individual or entity carrying out economic activities for the provision of taxable services in Morocco is considered a "taxable person" for VAT purposes. This includes businesses established in Morocco and foreign businesses providing services in Morocco.

VAT Registration

Businesses exceeding the VAT registration threshold must register for VAT with the Moroccan Tax Authorities.

VAT Calculation

VAT is calculated by applying the applicable rate to the taxable value of the service. Taxable businesses can generally deduct VAT paid on purchases (input VAT) from their VAT liability on sales (output VAT).

VAT Invoicing

Taxable businesses must issue VAT invoices containing specific information, including supplier and customer details, VAT registration numbers, date and invoice number, description of services, taxable amount, and VAT charged.

Filing and Payment

VAT returns are filed monthly or quarterly, depending on the turnover. VAT due must be paid to the tax authorities by the stipulated deadline.

VAT Exemptions

Certain types of services are exempt from VAT in Morocco, including financial services, medical and healthcare services, and educational services.

Additional Notes

Morocco has specific rules for VAT on digital services supplied by foreign providers to Moroccan consumers. The 2024 Finance Law introduced changes to VAT withholding and refund mechanisms. For the most up-to-date and specific guidance on VAT for services in Morocco, it's always advisable to consult with a Moroccan tax advisor or refer to the official guidance from the Moroccan Tax Administration.

Morocco offers various tax incentives to promote investment, specific industries, and regional development.

Industrial Acceleration Zones (IAZs)

Businesses operating within designated IAZs benefit from a 5-year Corporate Income Tax (CIT) exemption, followed by a reduced 15% CIT rate. Other incentives within IAZs include Value-Added Tax (VAT) exemptions and withholding tax exemptions on dividends for non-residents.

Export-Oriented Businesses

Companies exporting goods or services can benefit from a reduced CIT rate (maximum of 20%) and VAT exemptions (zero-rating) on exported products and related services.

Casablanca Finance City (CFC)

Companies with CFC status enjoy a full CIT exemption for the first five years and a reduced rate of 8.75% for the following 20 years. Additional benefits include exemption from capital gains tax and VAT.

Specific Sectors

Renewable Energy

Tax incentives are available for companies investing in renewable energy projects.

Mining

Tax incentives are offered for mining exploration and exploitation activities.

Agriculture and Fisheries

Reduced CIT rates and other tax benefits might be available in these industries.

Regional Development Incentives

Businesses investing in certain less-developed regions of Morocco might be eligible for additional tax incentives.

Young Innovative Companies

Companies can deduct an amount equal to the corporate tax paid on their investment in young innovative companies.

How to Access Tax Incentives

Many tax incentives are granted based on specific eligibility criteria or upon approval by relevant authorities. Businesses should consult with the Moroccan Investment Development Agency (AMDIE), tax advisors, or legal professionals to understand eligibility and application procedures.