Thinking Beyond Borders for Morocco

Thinking Beyond Borders for Morocco

January 2021 

Key message  |  Income tax  |  Social security  |  Compliance obligations  |  Immigration  |  Other issues

Income tax in Morocco is assessed on an annual and individual basis. Income tax liability is determined by applying progressive tax rates to the net taxable income of the individual. The determination of net taxable income depends on the residency status of the person and is generally achieved by taking gross taxable income less certain allowable deductions (including mandatory social security contributions).

Key message

Extended business travelers may be subject to Moroccan tax on their salary earned for work provided in Morocco.

Income tax

Liability for income tax

The Moroccan tax code does not make any distinction between Moroccan and foreign employees in relation to the taxation of employment income. Standard tax provisions would apply for the taxation of employment income earned by foreign employees in Morocco. An individual is considered a Moroccan resident for tax purposes if:

  • they maintain their permanent home in Morocco
  • they have their center of economic interests in Morocco
  • they are present in Morocco for at least 183 days during any period of 365 days.

Personal income tax applies to individuals as follows:

  • tax resident: with regard to their worldwide income (i.e. income from Moroccan sources and income from foreign sources)
  • non-tax resident: with regard to their income from Moroccan sources
  • individuals, whether they are tax resident in Morocco or not, that realize profits or receive income where the right of taxation is attributed to Morocco by virtue of a double tax treaty.

Tax trigger points

There is no minimum threshold/number of days worked in Morocco before taxation may be applied. However, the provisions of an international tax treaty may provide for an exemption from tax in Morocco on salary income, provided the employee respects the threshold number of days spent outside of Morocco during the relevant period as required by the particular treaty.

Types of taxable income

As a general rule, all types of remuneration and benefits received by an employee for employment activity rendered would constitute taxable income. Non-residents will also be subject to income tax on any other Moroccan-sourced income.

Tax rates

The net taxable salary income is taxed at progressive rates of 0, 10, 20, 30, 34 and 38 percent. In addition, Contribution for Social Solidarity will apply during year 2021 at the rate of 1.5% on the income of Moroccan source when such income is equal or greater than 240,000 MAD. 

Social security

Liability for social security

Employers employing Moroccan individuals subject to Moroccan social security have to register with Moroccan social security, Caisse National de Sécurité Sociale (CNSS), and comply with associated registration of employees to CNSS and withholding of contributions and filing requirements.

CNSS applies to payments of wages and similar income by employers to employees. Both the employer and employee are subject to CNSS contributions on the employees’ wages. The rate of employee contributions can be as much as 6.74 percent, and 21.09 percent for employers. Some contributions are capped while others are not. CNSS contributions are withheld and paid by the employer on a monthly basis. Morocco has signed social security agreements with other countries/jurisdictions, mainly: France, Belgium, the Netherlands, Spain, Sweden, Germany, Denmark, Tunisia, Canada and Portugal

Compliance obligations

Employees’ compliance obligations

Taxpayers with employment income paid by a non-resident employer, for which the right to tax is conferred on Morocco, must e-file annual income tax returns. The tax year in Morocco for individuals is the calendar year. The annual income tax return must be filed electronically and the corresponding income tax due paid before 1st March following the close of the tax year.

Employers reporting and withholding requirements

Tax on employment income must be withheld by employers domiciled or established in Morocco. Each month, the Moroccan employer has to withhold, and pay to the Treasury, income tax on every payment made to their employees. The tax payment to the Treasury must be done before the end of the following month. Employers domiciled or established in Morocco also have to file an annual declaration of wages before the end of February of each calendar year.

Where no exemption is applicable, employers are required to withhold employees’ social security contributions on a monthly basis and remit them, along with employer contributions, to CNSS.


Work permit/visa requirements

An employer that wants to hire a foreign employee should obtain an authorization from the Ministry of Employment of Morocco. This authorization is granted under the form of approval by the Ministry on the work contract for foreigners (Contrat de travail d’étranger).

Other issues

Double taxation treaties

Morocco has entered into a number of double taxation treaties with other jurisdictions to prevent double taxation and allow cooperation between Morocco and overseas tax authorities in enforcing their respective tax laws. As provided by the Constitution of Morocco, the provisions of international treaties would override domestic rules.

Permanent establishment implications

Morocco has entered into a number of double taxation treaties with other jurisdictions to prevent double taxation and allow cooperation between Morocco and overseas tax authorities in enforcing their respective tax laws. As provided by the Constitution of Morocco, the provisions of international treaties would override domestic rules.

Indirect taxes

Morocco levies value-added tax (VAT). VAT applies on industrial, commercial, hand-made or professional transactions carried out in Morocco, as well as on import transactions. The Moroccan tax code provides possible exemptions from VAT. The standard VAT rate is 20 percent.

Transfer pricing

A transfer pricing implication could arise to the extent that the employee is being paid by an entity in one jurisdiction but performing services for the benefit of the entity in another jurisdiction, in other words, a cross-border benefit is being provided. This would also be dependent on the nature and complexity of the services performed.

Local data privacy requirements

Morocco has data privacy laws.

Exchange control

Exchange controls are in place over Moroccan currency. However, foreign nationals’ resident in Morocco are entitled to transfer cash saved from their Moroccan wages subject to some requirements.

Non-deductible cost of assignees

Non-deductible costs for assignees include for example contributions to non-mandatory social security regimes and to foreign pension plans, unless the contribution is made exclusively to foreign pension funds up to the rate used for contributions of company’s staff. In this case, contributors may deduct contributions paid by them from their gross income. The amount deducted may not, however, exceed the amount deducted by the local personnel of the company for which they are working.

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All information contained in this publication is summarized by KPMG SA, the Moroccan member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on the Moroccan Income Tax Code of 31 December, 2006 and subsequent amendments; the Circular 717 of April 2011; the Web site of the Moroccan fiscal administrations; the Moroccan Social Security Law of 27 July, 1972; the Web site of the Moroccan Social Security administration; the Foreign Exchange Instruction of 31 January 2020; the Moroccan Labor Code of 11 September, 2003.