2023 Finance act checklist

The 2023 version of the General Tax Code will not be available, as usual, until the end of January. Marie-Aude and I have spent a good deal of time making the link between the text of the law, which only includes the modifications, and the 2022 General Tax Code, to write the articles detailing what changes for individuals and companies.

But many things are probably not relevant to O-Maroc readers. One never knows, but we strongly doubt that the lawyers and tax specialists of CFC companies or those making more than one hundred million dirhams in profit will read up on the subject with us…

Our readers tend to be expatriates or MREs, employees, retirees or managers of small companies.

That is why we have made a simplified version and selected of what can соnсеrn you, specifically. If you need more details, a clarification or a simulation, Marie-Aude and I, with our legal and tax experience, are at your disposal for a consultation.

Retired in Morocco: you pay less tax

Good news, the deduction on pensions for the first bracket (up to 168.000 dirhams / year) increases from 60% to 70%.

Employed in Morocco: your net income may increase

Normally, the increase in the allowance for professional expenses should reduce the income tax withhold on your pay slip and therefore increase your net income, up to about 500 dirhams per month.

If you are a salaried company manager and you pay yourself a minimum salary, you can therefore increase your income without it costing you anything.

Tenant teacher: it will be difficult

Your school has to pay the state a 30% withholding tax on your fees. You’ll be able to deduct it from your income tax if your rate is lower, if you’re in the 38% bracket you won’t pay more, but in the meantime you’ll еnсаіѕѕеr less money.

Be careful to get all the necessary paperwork from the school to be able to justify to the taxman that this rеtеnuе at source has been paid… and possibly ask for a partial refund if you are below the 30% bracket.

Freelance service providers: be careful not to exceed 80,000 dirhams/customer

This novelty concerns auto-еntrерrеnеurѕ, natural persons and all freelancers under the CPU regime (but not companies, even if they are SARLs AU). If you invoice more than 80,000 dirhams/year to a single customer, the additional turnover is subject to the normal regime (corporate tax, etc.)

Shareholder: withholding tax on dividends is reduced

But that’s not why you will get more, as this decrease is implemented to counterbalance the increase in the corporate tax rate. So in the end, if you’re lucky, it doesn’t change anything.

Business owner

The catalogue of changes is most important for you.

Export company: you pay more tax

The exemption/reduced rate on corporate tax for exporting еntrерrіѕеѕ is permanently abolished. One exception: companies in tourism. And if you have an off-shoring business, the exemption is limited to five years.

Company: you probably pay more tax

But it depends… If you make less than one million dirhams of Ьénéfісеѕ a year, you’ll pay more tax, with the corporate tax rate increasing to 20%, spread over four years. On the other hand, if you were above this amount, you will pay less tax.

The minimum contribution is slightly lower.

However, your advance payment will be calculated on the new rate, so it will increase.

Withholding tax for service providers

30% for individual teachers, 10% for individual service providers, to be paid in the month following the payment of the invoice.

Public procurement: you will be subject to a 5% withholding tax

This does not change anything in terms of results, since it is deducted from your income tax, but in terms of cash flow, it can be important.

Checking your service providers

Invoices from companies that have not filed a tax return are no longer deductible from your income. You should therefore put in place the necessary procedures to check the compliance of your endors(and, in the worst case, prove your good faith to the tax authorities).

Regularisation of inactive businesses

And if you are the one who has not filled your tax returns, the Moroccan tax authorities opened the door to regularization at a very low cost (5,000 dirhams/year)