Legalex

Morocco Tax Issues For None Residents

TAXES GENERALLY RELATING TO PROPERTY

Taxes on Rental Income (Impôts sur les Revenus Fonciers)

The rental income is the sum of all revenues received in Morocco from rented properties and fall within the scope of the Income Tax. Such revenues are taxable on a progressive basis as per the table below, after an automatic tax rebate of 40%. Please see below the current rates after the automatic 40% rebate.

Total revenus in DHS for the year Rate of tax Second deduction
0 and 24.000
0%
0
24.001 and 30.000
15%
3600
30.001 and 45.000
25%
6600
45.001 and 60.000
35%
11100
60.001 and 120.000
40%
14100
Over 120.000
42%
16500


Important Note for buyers:
Tax exemptions : Non-resident buyers are exempt from taxes on rental income for the first 3 years from the date of receipt of the licence of first occupation.
Those individuals that are not renting their properties will not be subject to this tax as there is no presumption of income in Morocco


Communal Tax (Taxe d´Edilité)

The base for the calculation of this tax is 10% of the achieved rental value of the property. For those properties that are not rented, the tax is calculated at 10% on an estimated rental value which is approx. 3% of the purchase value.
Tax exemptions : Buyers are exempt from Communal tax for the first year from the date of receipt of the licence of first occupation.


Urban Tax (Taxe Urbaine)

The base for the calculation of this tax is the estimated rental value (approx. 3% of the purchase value) upon which the following rates are applicable:

Yearly Rental Value of the property Rate of tax Deduction
0 and 3,000,00
0%
0
3.001,00 and 6.000
10%
300
6.001,00 and 12.000
16%
660
12.001,00 and 24.000
20%
1140
24.001,00 and 36.000
24%
2100
36.001,00 and 60.000
28%
3540
60.001,00 and over
30%
4750


Important Note for buyers:
Tax exemptions : Non-resident buyers are exempt from Urban taxes for the first 5 years from the date of receipt of licence of first occupation.
Please note that Urban Tax is only paid if you DO NOT rent the property and its value is calculated on the estimated rental value given by the Authorities (3% of purchase value).

Should the owner occupy permanently the property, the Tax Urbaine will be paid, but with a rebate of 75%.


Additional Tax

This tax amounts to 5% of the Communal Tax.


Summary of annual taxes

A) If the property is rented :
- Taxes on rental income (Revenus fonciers)
- Communal tax (Taxe d’Edilité)
- Additional tax

B) If the property is not rented:
- Urban tax (Taxe Urbaine)
- Communal tax (Taxe d’Edilité)
- Additional tax


Capital Gain Tax (Taxe sur le Profit Immobilier “TPI”)

The capital gains tax (Taxe sur le Profit Immobilier) is calculated on the NET profit realized upon completion (hence all expenses relating to the acquisition, maintenance, refit and resale of the property in question are deductible, including marketing costs but should never exceed 15% of the original acquisition price).

The tax due will then be either calculated as 20% of the net profit or as 3% of the declared resale price, whichever is higher.



OTHER TAXES

Death duties or Inheritance tax

The Moroccan Government does not levy taxes upon death. The simple procedure to register the property in the name of the beneficiaries of a deceased holder of Moroccan property will be for the beneficiaries to submit the certified copies of the official documents appointing them as beneficiaries to a local Notary and he will draft the appropriate document with the name of the new beneficiaries for its registration at the local Land Registry.




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