Population 31.5m Inflation 3.0% (2006)*
Main languages Arabic, Berber dialects, French GDP per head US$1,950*
Currency Moroccan dirham (MAD) GDP growth 6.7% (2006)*
Economic communities WTO
GDP sources 21.7% agriculture, 35.7% industry, 42.6% services
*Economist Intelligence Unit estimates, 2006.
Political environment
Morocco is a constitutional monarchy, in which the king, currently Mohammed VI, is the dominant political figure. The king appoints the prime minister, currently Driss Jettou, and government and heads the armed forces. Parliament has limited powers. The next national election is due by November 2007.
Foreign trade and investment
Exports US$11.7bn (2006)* Imports US$21.2bn (2006)*
*Economist Intelligence Unit, 2006 estimates.
Leading export markets: France, Spain, the UK and Italy.
Major exports: Clothing and other textiles, fish and inorganic chemicals.
The government actively encourages foreign investment.
Business and financing
Business forms Limited company (SA), limited liability company (SARL)
Forms of business organisation include the limited company, limited liability company, joint stock company, partnership, simplified limited company, economic interest group and branch.
Casablanca is a financial centre.
Labour environment
Unemployment rate 10.2% (2006)* Minimum wage MAD 2,010 (monthly)
*Economist Intelligence Unit estimate, 2006.
Morocco has one minimum wage for the industrial, trade and liberal professions sectors (MAD 9.66 per hour) and another for the agricultural sector (MAD 50 per day), but the minimum wages are not observed in the extensive informal sector. The department of social security is responsible for collecting social contributions and paying out benefits.
Foreign employees are only permitted to work in Morocco with the prior authorisation of the Ministry of Employment. The police must issue a residence permit. There are no restrictions on the number of foreign employees per company.
Taxation
Corporate tax
Main rate 35%
Resident and non-resident companies pay tax only on Moroccan-source income. The tax rate is 35%, but a 39.6% rate applies to credit institutions and insurance companies. Non-resident companies are subject to tax on profits relating to property owned or business activities undertaken in Morocco. Foreign companies engaged in construction, engineering or assembly works may opt for a special tax regime under which they are taxed at 8% on the total contract price. Profits remitted abroad by foreign companies may be subject to a 10% branch profits tax. Tax relief is available for companies established in Tangier. Partnership income is allocated to the partners for taxation purposes, but an election may be available in certain cases for a partnership to be taxed as a corporate entity.
Individual tax
Progressive rates to 44%
Resident individuals are subject to tax on their total income from Moroccan and foreign sources, with a credit for foreign tax paid (if a tax treaty applies and provides for such a credit). Non-resident individuals pay tax only on Moroccan-source income. An individual is resident in Morocco if the individual's permanent home or centre of economic interests is in Morocco or if the individual resides in Morocco for any period exceeding 183 days within a 365-day period. Individual income tax is charged at progressive rates ranging from 0% to 44% on total income, depending on the amount of taxable income; certain types of income are taxed separately. Income from shares, including gains on their disposal, is subject to a 10% final withholding tax, and a 20% final withholding tax applies to income from bonds and other debt securities.
The 2007 finance law project provides certain amendments on wages slices and the rate applicable to each slice. The maximum rate is 42%. The gross salary less than MAD 2.600 will be exempt from income tax.
Capital gains
Generally taxed as income
Capital gains of companies and individuals are generally taxed as income. However, capital gains realised by non-resident companies and individuals on the sale of Moroccan shares listed on the Casablanca stock exchange are exempt (the 2006 finance law abolished the exemption available for all shares and limited the exemption to shares listed on the stock exchange).
Foreign companies and individuals selling shares not listed on the stock exchange generally must submit a tax return and pay the tax due within a month after the sale.
Individuals who sell immovable property are subject to a 20% final withholding tax on the gain, subject to a minimum liability of 3% of the gross proceeds.
Indirect tax
VAT standard rate 20% Lower rates 14%, 10% and 7%
Value-added tax (VAT) applies to most transactions. The standard rate is 20%. A 14% rate applies to construction activities and goods and passenger transport; a 10% rate applies to catering and hotel accommodation, loan and exchange facilities provided by banks, and leasing operations; and a lower rate of 7% applies to supplies of goods for general consumption and private motor vehicles. Exports, international transport and acquisition of equipment for agriculture and fishing are zero-rated. Exemptions include several basic food products, books and newspapers, certain loans and other financial instruments.
Non-residents who do not have a permanent establishment in Morocco must appoint a VAT representative in Morocco to comply with the VAT obligations (filing VAT returns, payment, etc).
Tax administration and compliance
Tax year Companies: accounting period; Individuals: calendar year
Companies pay advance tax in four quarterly instalments. A tax return, with payment of the balance of tax, is due within three months after the end of the accounting period. Foreign companies subject to the flat-rate tax must submit a statement of turnover by April 1st each year.
Resident individuals receiving income other than their Moroccan wages must submit a tax return by March 31st following the tax year-end, and individuals selling immovable property must submit a return of the income within a month after the sale.
Additional tax information
Withholding taxes Dividends, Interest, Royalties and other services remuneration 10%, unless reduced by an applicable tax treaty.
Tax treaties Morocco has concluded more than 30 double-tax treaties.
Dividends A 10% withholding tax applies to dividends.
Revenue protection There are some provisions on transfer pricing, but there is no offshore company (CFC) legislation (except for banks and offshore holding companies for which special legislation applies).
Groups There is no provision for group taxation.
Incentives Export free zones; tourism; artisan enterprises; exports; enterprises established in certain zones (in the north and south of Morocco); VAT exemption on import of equipment, customs duties exemption where an investment convention is concluded with the Moroccan government.
Other taxes Registration duty, Stamp duty, Tax on insurance contracts, Tax for professional training, Tax on undeveloped urban land, Business tax, Urban tax, Municipal tax, Hotel taxes.
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Norman Wiles says: | 2009-05-03 02:48:39 |
| It seems that this information is out of date and needs reviewing, especially with regard to taxes e.g. I blieve the basic corporate tax has been reduced to 30%. | ||
Comments: 1