The great revolution of the 2023 finance law concerns corporate tax, with changes that go in the direction of a homogenisation of statutes, corporate tax rates, VAT, increased control, a transfer of the tax collection burden within the framework of the new withholding taxes and a desire to reduce the tax burden of the middle class.
Towards an (almost) single corporate tax
Until 2022, the different tax rates on profits depended on the total amount of profit, with three brackets and sectoral particularities:
- 10% up to 300,000 dirhams
- 17.5% from 300,000 to 1,000,000 dirhams
- 28% above one million dirhams for industrial companies
- 31% above one million dirhams for other companies
- 37% for credit institutions and insurance companies.
A certain number of companies benefited from a rate capped at 20% regardless of the amount of their profit:
- exporting companies
- hotels and tourist establishments
- craft enterprises
- private educational or vocational training establishments
- agricultural holdings
- off-shoring companies (with, in addition, a total exemption for the first 5 years)
Finally, until 2019, newly created companies benefited from a tax exemption proportional to their export turnover.
Target 2026, a standard rate of 20% for everyone:
- consolidation of tоutеѕ brackets into a single rate of 20%
- Introduction of a 35% rate for companies with a profit of more than 100 million dirhams
- introduction of a 40% rate for credit institutions and similar bodies
In 2023, we are almost there:
- the standard rate of 20% is introduced, including for craft enterprises, educational institutions, university residences, farmers, etc.
- the 35% rate for large profits is implemented, with temporary exemptions for companies with CFC status, companies in free zones and new companies that commit to investing 1.5 billion dirhams within 5 years
- The reduced rate of taxation for the part of the export turnover is abolished
A transitional regime until 2026:
| In percent | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|
| 10% rate (profit up to 300.00 dirhams) | 12,5 | 15 | 17,5 | 20 |
| 15% rate (CFC and tax-free areas) | 16,25 | 17,5 | 18,75 | 20 |
| 20% rate (profit over 1.000.000 millions dirhams) | 23,75 | 27,50 | 31,25 | 35 |
| 26% rate (profit from 300.00 dirhams up to 1.000.000, industrial enterprises) | 24,50 | 23 | 21,50 | 20 |
| 31% rate and profit under 100 millions) | 28,25 | 25,50 | 22,75 | 20 |
| 31% rate and profit over 100 millions) | 32 | 33 | 34 | 35 |
| withholding tax on dividends | 13,75 | 12,50 | 11,25 | 10 |
The exemption from corporate tax for export turnover
The permanent exemption is replaced by a temporary exemption of five years from the first export operation, and is limited to
- companies operating in the tourism sector
- companies with CFC status (with an additional limitation of five years following the creation of the company)
The total exemption from corporate tax is limited to 5 years
It is maintained only for :
- off-shoring companies
- companies located in free zones and industrial acceleration zones
Modification of the withholding tax rates
The withholding tax on dividends, which was 15%, is reduced to 10%.
The aim is to balance the effect of possible increases of the corporate tax for shareholders.
Reduction of the minimum contribution
The minimum contribution is due in the absence of corporate tax, it is based on turnover and its minimum amount is 3,000 dirhams.
The normal rate of the minimum contribution is increased from 0.5 to 0.25%, the reduced rate is increased from 0.25 to 0.15% and the rate for regulated professions is increased from 6% to 4%.
Withholding tax applied to service providers
This is THE subject that has been causing anger. Tired of seeing a number of professions under-declaring their income, the government has decided, intelligently, to transfer the burden of collection… to the еntrерrіѕеѕ.
This measure was heavily discussed and the final version is relatively soft: it only concerns natural persons and it is 10%.
It must be paid in the month following the month of payment of the invoice.
Be aware that if you are a state provider, even if you are a legal entity, a withholding tax ѕоurсе will be applied, but only by 5%.
No deductibility of invoices from inactive companies
This is a very small article which I think has gone unnoticed, but which is fraught with consequences.
Article 146, on supporting documents for expenses, is completed by a :
when the tax authorities establish that an invoice has been issued by or on behalf of an inactive еntrерrіѕе within the meaning of Article 228 bis below, the deduction corresponding to this invoice is not allowed.