Morocco has a taxation system that includes both direct and indirect taxes. The system is administered by the Direction Générale des Impôts (DGI).
Double Taxation Agreements
Morocco has signed double taxation agreements with several countries, including the United States, France, and Spain. These agreements aim to avoid double taxation on income earned in both Morocco and the other country. They also provide relief from withholding taxes on dividends, interest, and royalties.
Main Taxes for Expats
Expats who are considered resident in Morocco for tax purposes are subject to income tax on their worldwide income. The income tax rates for resident individuals are progressive, ranging from 0% to 38%.
Non-resident individuals are only taxed on their income earned in Morocco. The income tax rate for non-resident individuals is a flat rate of 20%.
Value Added Tax
Value Added Tax (VAT) is a tax on the sale of goods and services in Morocco. The standard rate of VAT is 20%. However, there are reduced rates of VAT for certain goods and services, such as food and medicine.
Special Tax Breaks for Expats
Tax Exemption for Foreign Source Income
Expats who are resident in Morocco but earn income from foreign sources may be eligible for a tax exemption on that income. To qualify for the exemption, the income must have been subject to tax in the country of origin.
Tax Exemption for Foreign Pension Income
Expats who receive pension income from abroad may be eligible for a tax exemption on that income. The exemption is available under certain conditions, such as if the pension was earned while the individual was a resident in the country where the pension was earned.
Filing a Tax Return in Morocco
Expats who are considered resident in Morocco for tax purposes are required to file a tax return each year. The tax return must be filed by March 31st of the following year.
Expats can file their tax returns online using the DGI’s online portal. To do so, they need to obtain a digital certificate, which can be obtained through the DGI’s website.
When filing a tax return, expats need to provide details of their income, deductions, and credits for the relevant tax year. If they have any foreign income or assets, they may also need to declare them on their tax return.
Tax Exit Procedures
Expats who are leaving Morocco to move abroad need to follow certain tax exit procedures. Firstly, they need to notify the DGI of their departure and provide details of their new address abroad. They should also settle any outstanding tax liabilities before leaving Morocco.
Expats who have paid tax in Morocco may be entitled to claim a refund of some of the tax they have paid. To do so, they need to file a tax return for the relevant tax year and claim the refund through the normal tax refund process.
The taxation system in Morocco is relatively straightforward compared to some other countries in the region. Expats in Morocco need to be aware of the main taxes that apply to them, such as income tax and value-added tax, as well as any special tax breaks that may be available. They also need to ensure they file their tax returns on time and follow the tax exit procedures if they are leaving Morocco to move abroad. By understanding the Moroccan tax system, expats can ensure they are complying with their tax obligations and maximizing any tax benefits available to them.