Expatriate tax ebook - Morocco

What taxes?

Capital gains tax
Inheritance, estate and gift taxes
Investment income
Local taxes
Real estate taxes
Social security taxes
Stock options
Wealth taxes
Other specific taxes

Capital gains tax
Tax on capital gains on shares
The profit relating to the assignment of stocks and shares as well as other securities of capital and debt instruments during a calendar year is exempted from tax when these assignments do not exceed the threshold of MAD 30,000. Taxation rate for profits on transferable capital from a Moroccan source amounts to 15% for net profit arising from disposal of listed shares and 20% for net profits arising from sale of unlisted shares.

Tax on capital gains on real estate
The followings are exempted from tax: profits made by any person who assigns in the calendar year any immovable property the total value of which does not exceed MAD 60,000. Taxation rate for real estate profits amounts to 20%.

Inheritance, estate & gift taxes
The followings are exempted from income tax on real estate proceeds: assignments free of charge between ascendants and descendents and between spouses, brothers and sisters.

Likewise, are exempted: assignments free of charge of stocks and shares and other securities of capital between ascendants and descendents and between spouses, brothers and sisters.

Investment income
Dividends from any foreign source received by any resident individual are submitted to a 15% rate.

Local taxes
There are local taxes (housing, Taxe Professionnelle, property).

Real estate tax
See "Capital gains on real estate"

Social security taxes
Expatriates are submitted to Moroccan social laws unless they are “seconded” for a determined period not exceeding the duration authorized by bilateral agreements on social security entered into between Morocco and some countries. In this case, the seconded person continues to be submitted to the social laws of his/her country as if he/she continues to be employed there.

The followings are compulsorily submitted to social security system:

Salaried employees, apprentices working for one or several employers in any industry, trade and professions or in the service of any notary, association, trade union, civil partnership or any group of whatsoever nature, irrespective of

the nature of their remunerations, form, nature or validity of their contract.

Contributions to National Fund of Social Security are calculated on the basis of the gross remuneration and other benefits granted to the personnel, according to the following rates:

Stock options
The following is exempted from income tax: additional amount incurred by the employer company as part of the allotment of options to subscribe or purchase shares by the aforesaid company to the salaried employees thereof decided by the extraordinary general assembly.

However, exemption is subject to the two following conditions:

1. The additional amount must not exceed 10% of the value of the share at the date of the allotment of the option; failing which, the fraction exceeding the rate of the additional amount as fixed above is considered as a make-up pay taxed at the rate of the income tax schedule.

2. Purchased shares must be registered shares and they must not be assigned before a 3-year period of unavailability following the date of the exercise of the option.

In this case, the difference between the value of the share at the date of the exercise of the option and its value at the date of the allotment of the option will be considered as an increase in the purchase value taxable by way of gains on transferable capital at the time when shares are assigned.

In case of the assignment of shares before the expiry of the foregoing unavailability period, the aforesaid exempted additional amount and the increase in the purchase value will be considered as a make-up pay chargeable to tax as set out in a).

Wealth tax
Not applicable

Other specific taxes

Foreign pensions received by tax resident in Morocco

With respect to pensions, to determine the net taxable income, the tax administration provides an allowance of 40% on the gross taxable income (Article 60 of the CGI).

Moreover, person that have their tax resident in Morocco and received foreign pensions could get a tax allowance equal to 80% of the amount of tax due as corresponding to their pension that are transferred definitely to non-convertible dirham account.

Information about Morocco:

• introduction
• facts and figures
• basis of taxation
• what taxes?
• tax planning opportunities