The Moroccan Finance Act 2017 has introduced a derogatory tax regime regarding real estate contributions in kind to REITs. Indeed, this specific taxation mode expressly derogates from articles 8 and 33-II of the Moroccan Tax Code which define the notions of taxable income. This regime is temporary applicable to contributions made until December 31, 2022.

Previously, this regime was applicable to contributions made until December 31, 2020. However, the 2021 Finance Act has provided for an additional two-year period for the application of the transitional measure to encourage real estate contributions to REITs.

Thus, the article 247-XXVI of the Moroccan Tax Code provides that taxpayers who proceed to the contribution of real estate registered in their fixed assets to a REIT are not taxed on the net capital gain realized as a result of the said contribution, subject to the following conditions:

  1. Filing of a specific declaration at the tax administration within 60 days;
  2. Evaluation of the contribution by a certified public accountant;
  3. Commitment in the contribution deed to pay the tax on the capital gain at the time of sale of the REIT’s securities;
  4. The contribution must be made before December 31, 2022 (Finance Act 2021).

If these conditions are satisfied, the company having made the contribution, benefits at the time of the total or partial disposal of the REIT shares, from a 50% reduction in corporate tax on the capital gain realized following the contribution of real estate to the REIT.

This leads to the computation of the tax at the time of the recognition of the capital gain on the contribution, and its payment at the time of the total or partial transfer of REIT shares.

Furthermore, in accordance with the provisions of article 6-I (A and C) of the MTC, the REIT benefit from:

  • The total and permanent exemption from corporate income tax for activities carried out and authorized by law n°70.14 regulating REITs.
  • Permanent exemption from withholding tax on dividends received by REITs as well as on interests paid to REITs.

The benefit of the above-mentioned exemptions was subject to the respect of certain conditions provided by article 7-XI of the MTC, namely:

  1. To evaluate the elements contributed to these organizations by a certified public accountant;
  2. To keep the real estate contributed to the said REITs for a period of 10 years minimum as from the date of the said contribution;
  3. To distribute :
    • 100% of the dividends and income from equity securities;
    • 100% of the income from fixed-income investments;
    • At least 60% of the capital gain realized on the sale of securities;
    • At least 85% of the result of the fiscal year relating to the rental of buildings constructed for professional use. The 2021 finance act has completed these provisions by specifying that REITs which distribute at least 85% of the result of the financial year relating to the rental of buildings constructed for residential use are also eligible for the above-mentioned exemptions.

Legal references:

  • The articles 6-I (A et C), 7-XI et 247-XXVI of Moroccan Tax Code (MTC)
  • The law 70-14 relating to OPCI

The Finance Act 2018 has introduced a registration duty exemption for acts of capital increase realized by cash, by incorporation of shareholder’s current account or by capitalization of profits or reserves.

However, the proportional rate of 1% remained applicable to some capital increase operations carried out by:

  • Contributions in kind;
  • Incorporation of liquid and payable debts on the company (other than those appearing in shareholder’s current account);
  • Incorporation of capital gains resulting from the revaluation of the company’s assets in case of merger.

The Finance Act 2021 has reduced the registration duties applicable to acts of capital increase carried out through the above mentioned operations. This rate is now 0.5% instead of 1%, it is applied on the amount or value of the contribution, including the share premium.

It should be noted that merger operations are subject to the common law regime for contributions carried out at the capital increase of companies. However, in the event of a merger by absorption, the deed recording the capital increase of the absorbing company is subject to registration duty at the rate of 0.5%, calculated on the amount or value of the contribution, including the merger premium and after deduction of the liabilities encumbering the contribution borne by the absorbing company.

Following the launch of the Election of delegates employees 2021, which are scheduled to take place between 10 and 20 June 2021, all establishments with 10 or more employees are required to organise employee delegate elections in accordance with the provisions of the Labour Code.

However, workplaces with fewer than ten permanent employees may adopt the system of an employee representative by written agreement.

The employee delegates are the employees’ spokespersons to the head of the company, and their tasks are:

  • To represent the staff before the employer and to inform him of individual complaints relating to working conditions arising from the application of labour legislation, the employment contract, the collective labour agreement or the internal regulations;
  • To refer these complaints to the labour inspector in the event that disagreement persists;

The employee delegates are elected for a fixed term of six years by the company’s employees of both sexes, divided into two colleges, labourers and employees on the one hand and managers and similar staff on the other.

  1. Establishment of electoral lists

The employer is obliged to draw up and post the electoral lists of all employees who meet the conditions listed in article 430 of the Labour Code by 30 April 2021 at the latest. These lists must be signed jointly by the employer and the labour inspector.

Within eight days of the posting of the electoral lists, any employee may request his or her registration, as well as the registration of an omitted voter or the removal of a person who was wrongly registered, from 30 April 2021 to 7 May 2021.

The employer is obliged to respond to employees’ complaints about the electoral lists within 10 days, from 30 April 2021 to 9 May 2021, and these complaints are recorded in a register made available to the voters by the employer, which indicates the outcome of the complaints.

The employees must lodge an appeal against the electoral lists by means of a petition registered free of charge at the court of first instance against the electoral lists from 10 May 2021 to 17 May 2021.

  1. Collection of Nomination Lists

The Candidates must file nomination lists, against receipt, with the employer who must sign a copy between 18 May 2021 and 01 June 2021.

  1. Constitution of the electoral commission and polling station

Following the collection of the lists of candidates, the electoral commission is established, composed of the employer or his representative and a representative of each of the lists of candidates.

This commission is in charge of studying and verifying the lists of candidates and to designate the members of the polling station or stations. The mission of the polling station is mainly to ensure the smooth running of the election.

The employer is required to post the lists of candidates in the places provided for this purpose in accordance with Article 455 of the Labour Code, and this from 02 June 2021 until 09 June 2021.

  1. Organization of the electoral operations.

The employer is obliged to proceed to the elections of the employees’ delegates between 10 June 2021 and 20 June 2021, by proportional representation according to the rule of the highest average and by secret ballot.

The results of the elections are validly proclaimed in the first round when the number of voters is at least equal to half of the registered voters. Otherwise, if the number of voters is less than half of the registered voters, a second round of voting is organized within a maximum of 10 days.

The results of the elections are posted after the counting of the votes in the places provided internally for this purpose.

In conclusion, it is to be reminded that the employer is obliged to organize the elections of the staff delegates in the modalities and conditions presented above, the non-respect of this obligation subjects the employer to a fine of 25.000 to 30.000 dirhams, doubled in case of recidivism.

The Finance Act 2020 has introduced a 25% tax rebate on the taxable basis corresponding to the mobile payment turnover made by individual professionals working under the simplified net income regime or the lump sum benefice regime.

This tax benefit aims to reduce the payments in cash and to foster payment through mobiles. It allows the following operations to be carried out:

– Money transfers;

– Payment of commercial transactions;

– Cash withdrawal and deposits.

In order to stimulate this payment method, the Amending Finance Act 2020 has replaced the above-mentioned rebate with provisions which stipulate that the turnover generated through mobile payment is not considered for five consecutive years when determining:

– The taxable basis of the income tax due by professional taxpayers working under the Simplified Net Income regime (RNS) or the Unique Professional Contribution regime (CPU);

– Thresholds for the application of income tax according to the above-mentioned regimes;

– Thresholds for application of VAT.

This measure is applicable for income declarations filed for the years 2020 to 2024.

Legal reference:

Article 247 ter of Moroccan Tax Code (MTC).

In order to facilitate restructuring operations, The Finance Act for FY2017 introduced a tax incentive scheme in favor of intragroup operations related to reallocation of production means and transfer fixed assets.

According to this regime completed by the Finance Act 2020, the transfer of fixed assets can be carried out between companies subject to corporate income tax, except for real estate investment trusts, without affecting their taxable income, if the said transactions are carried out between the members of a corporate group, constituted at the initiative of a “parent company” which holds continuously, directly or indirectly, at least 80% of the share capital of the said companies.

Fixed assets concerned:

  • Tangible fixed assets (Land, construction, office equipment…);
  • Intangible assets (Patents, trademarks, commercial funds…);
  • Financial fixed assets (Equity securities, fixed loans…).

Conditions of the transfer:

  • The fixed assets subject to the transfer must be registered in the fixed asset of the companies concerned by the transfer operations.
  • The transfer of fixed assets is any operation resulting in a transfer of ownership of tangible, intangible and financial fixed assets between companies members of the same group;
  • The fixed assets must not be sold to another company that is not part of the group and must not be removed from the fixed assets of the companies to which they have been transferred;
  • The companies concerned by the transfer operations must not leave the group.


  • The transferred fixed assets, according to the aforementioned conditions, must be evaluated at their actual value on the day of the transfer and the resulting capital gain is not taken into consideration for the determination of the tax result of the companies having carried out the said transfer.
  • The companies which benefit from the transfer of fixed assets can deduct from their tax result the depreciation charges of these fixed assets only up to the limit of the depreciation calculated on the basis of their original value booked at the level of the group company which carried out the first transfer operation.

In order to carry out the operations of transfer of fixed assets (tangible, intangible and financial), and to benefit from the tax incentive regime for intra-group restructuring operations, the following declarative obligations must be respected:

For the parent company:

  • File a specific application before its local tax administration within three months of the opening date of the fiscal year in which the option for the tax incentive is made;
  • Accompany this application with a list of the companies that are members of the group, specifying the name, the fiscal ID and the address of these companies as well as the percentage of their capital held by the parent company in order to join the group;
  • Produce a copy of the agreement of the companies to join the group.

In the event of a change in the composition of the group, the parent company must attach to its tax return for each financial year a statement listing the new companies integrated the group, with a copy of the deed recording their agreement, as well as the companies that left the group during the previous financial year.

In case of transfer operations, the parent company must also produce a statement clarifying all the operations of transfer of fixed assets carried out between the companies members of the group during a specific fiscal year, as well as the destination of the said fixed assets after the transfer operation, and this within a period of 3 months following the closing date of the fiscal year during which the transfer was carried out or the one during which a change in the destination of the said fixed assets was operated.

For members of the corporate group:

When a company becomes a member of the group, it must file a statement showing the group to which it belongs, the parent company that formed it and the percentage of share capital held by the parent company and the other companies in the group, within three months of the opening date of the first fiscal year in which it joined the group.

The companies having transferred the fixed assets within the group must file a statement specifying their original value appearing in the assets of the company of the group having carried out the first operation of transfer as well as their net book value and their real value at the day of the transfer and this, within the three months following the closing date of the fiscal year of the transfer.

The companies having profited from the transfer of the aforementioned fixed assets must file within three months following the closing date of each fiscal year, a statement specifying the original value appearing in the fixed assets of the company of the group having carried out the first operation of transfer, the net book value and the actual value at the date of the transfer as well as the deductible depreciation and those added back into the taxable result.

If a company leaves the group or if a fixed asset is withdrawn or sold to a company that is not part of the group, the local tax administration must be notified by the concerned company within three months following  the closing date of the financial year concerned.

Legal references:

Article 161 bis-I of Moroccan Tax Code (MTC)

Article 20 bis of Moroccan Tax Code (MTC)

The role of the labor inspectorate is defined by the Labor Code, in particular Book V (articles 530 to 548).

1.Labor inspector

In Morocco, labor inspectors are State officials, and their powers derive from the control mission assigned to them in accordance with Article 539 of the Labor Code, “the agents in charge of the labor inspection establish, by means of official reports which are valid until proven otherwise, the infractions of the provisions of the Labor Code and the regulations adopted for its application”.

The agents in charge of the labor inspection are :

    • labor inspectors and controllers
    •  inspectors and controllers of social laws in agriculture,
    • medical inspectors of work,
    • engineers in charge of safety

2.Missions of the Labor Inspector

Labor inspectors are in charge of several missions, including

  1. Ensuring the application of legislative and regulatory provisions relating to work;
  2. Provide information and technical advice to employers and employees on the most effective ways to comply with the legal provisions;
  3. To report to the governmental authority in charge of labor the deficiencies or violations of certain legislative and regulatory provisions in force;
  4. to attempt conciliation in matters of individual labor disputes […]”.

Therefore, labor inspection officers may, among other things:

  • Enter freely the establishments subject to their control
  • Interview all personnel as well as the employer
  • Request communication of all books, registers and documents whose keeping is prescribed by the legislation relating to work, in order to verify their conformity with the legislative provisions and to make copies or take extracts and address observations or formal notices to the employers with deadlines in case of violation of the legislative or regulatory provisions relating to hygiene and safety

And to enable them to ensure the application of social legislation, the legislator has provided the agents in charge of the labor inspection with certain legal tools. To this end, the said inspectors can carry out inspection visits, make observations and, if necessary, issue formal notices with or without delay and official reports against recalcitrant employers.

3.Scope of intervention of the labor inspector

The labor inspector has the power to intervene with employees and industrial, commercial, agricultural, artisanal and liberal professions establishments subject to the Labor Code.

The doctors and engineers in charge of the labor inspectorate each intervene within the limits of their specialty.

In conclusion, the inspector must always make sure that the establishment he or she intends to inspect is subject to the Labour Code or that it does not fall under the jurisdiction of other specific control systems.

A permanent employment contract may be terminated at any time, either at the employee’s initiative, by resignation, or at the employer’s initiative, by the implementation of a dismissal procedure.

The dismissal must necessarily be motivated, under penalty of being requalified as an unfair dismissal.

However, the reason for the dismissal must be both real, the facts must be accurate and verifiable, and serious: the facts must be sufficiently serious for the dismissal to be inevitable.

In the absence of a legal definition, serious misconduct can be defined as a violation of the rules established by the internal regulations, the seriousness of which makes it impossible to maintain, without damage of the employment relationship.

Indeed, the article 39 of the new Moroccan labor code only provides an indicative list of what may constitute a serious misconduct.

Dismissal must, under penalty of being qualified as abusive by the judge, comply with a strict formalism framed by provisions that are of public order, even if the reason is valid.

The procedure for dismissal for serious misconduct:

1.Prior Interview

The labor code provides that the employee must be convene to an interview in order to be an heard by the employer, in the presence of the employees’ delegate or the union representative or another employee of the company, whom he chooses himself. This interview must be held within a period that doesn’t exceed starting eight days from the date of the observation of the fault.

During this interview, the employer draws up a report which must be signed by both parties and a copy of which is given to the employee.

In case of refusal of the employee to sign the report or to take it, the employer must obligatorily resort to the labor inspector.

2.Notification of the dismissal

The decision to dismiss must be notified to the employee in person against receipt, by registered letter with acknowledgement of receipt or through a bailiff, within forty-eight hours following the date on which the decision to dismiss was taken.

However, the letter of dismissal must indicate the reasons justifying the dismissal of the employee, the date on which the employee was heard, the period during which the decision can be contested before the competent court.

3.Submission of documents to the labor inspector

A copy of the dismissal decision must be sent to the labor inspector, and must include the reasons for the employee’s dismissal, the date on which he was heard, and be accompanied by a copy of the minutes of the interview with the employee.

Despite the seriousness of the acts of which employee is accused, any failure to comply with the dismissal procedure as described above shall result in the dismissal being considered as abusive, thus entitling the employee to all dismissal indemnities, detailed as follows:

1.Severance pays

Based on the average salary received during the 52 weeks preceding the end of the contract multiplied by the indemnity for each year or fraction of a year worked.

Range of years worked  Allowances for each year worked
First five years of seniority 96 hours of salary
Period of seniority from 6 to 10 years 144 hours of salary
Period of seniority from 11 to 15 years 192 hours of salary
Period of seniority exceeding 15 years 240 hours of salary

2.Damages and interest

1.5 months of salary for each year of seniority, capped at 36 months of salary.

3.Notice period

4.Compensation for unconsumed leave

The Moroccan Finance Act for FY2019 introduced the obligation to complete the registration formality for deeds and agreements recording monetary obligations or acknowledgements of debt of one person towards another.

In this respect, the Tax Administration has confirmed in a tax ruling dated March 2020, that agreements for advances on shareholders’ current accounts whether written or verbal and whatever the form of the deed recording them, authentic or private, are subject to the proportional registration duty of 1.5%. This position has caused an outrage of the business community, which considers this measure as an obstacle on corporate financing by its partners.

The Finance Act for 2021 provided the appropriate response to this issue of taxation of financing by cancelling the Registration Duties applicable to deeds recording advances in shareholders’ current accounts as well as deeds relating to the obligations and acknowledgements of debt referred to the Article 18 of Act No. 103-12 related to credit institutions.

The article 18 of Act No. 103-12 covers in particular: Commercial credit, lease- purchase agreements, cash transactions with companies which belong to the same group, the issue of securities and debt securities traded on a regulated market, the granting of payroll advances or loans to employees for social reasons, the issue of vouchers and cards delivered for the purchase of goods or services from a person…

Therefore, as from January 2021, are exempt from Registration Duties: the deeds recording advances in shareholders’ current accounts as well as the deeds relating to the obligations and acknowledgments of debt referred to in Article 18 of Law n°103-12 related to credit institutions and similar entities.

In addition, it should be noted that private or authentic deeds relating to obligations and acknowledgements of debt remain subject to the registration formality even through exempted from payment of registration duties.

Legal references:

Articles 127-I; 129-V-9; 136-III of Moroccan Tax Code.


Written by Ali SALIM  TAX Manager

The commercial sign is obligatorily a sign or an appellation which is used to identify and locate geographically a commercial establishment, and which makes it possible to distinguish it from the other commercial establishments.

1.Condition of attribution of a commercial sign :

To be attributed, the requested name must meet the following criteria :

  • The name requested must not be contrary to public order and good morals (It is forbidden to use words contrary to public order and good morals or terms suggesting that the business is engaged in illicit activities).
  • The name requested must not be confusing.

The name must not already be in use.

  • It must not be confusing with an existing trademark.
  • It must not imply that it is a public body or a partner of an international organization.

2.Obtaining a commercial sign :

The Central Register of Commerce held by the OMPIC issues a negative certificate attesting to the availability of the requested commercial name (name, sign and acronym if applicable). (Article 33 paragraph 2 of the Commercial Code).

The negative certificate is dematerialized. It is identified by a unique number, and does not require a stamp or signature.

3.Obligation of registration in the trade register :

Any sign and elements stipulated in article 74 of the Commercial Code whose beneficiary will not have made the registration in the Trade Register within ninety (90) days from the date of issue of the negative certificate, by the Central Trade Register service, cannot be registered in the Trade Register.

Merchants wishing to have a commercial sign must mention it in their declaration of registration in the Commercial Register. (Article 42 paragraph 9 of the Commercial Code).

4.Formalities for registration in the commercial register :

In order for the commercial sign to be valid, it is indispensable to register it in the commercial register. To do so, the person concerned must present to the clerk of the commercial register office the negative certificate dated less than ninety (90) days, as well as the declaration (model 4) in three signed and legalized copies.

The commercial sign is protected only on a local radiation. This protection is also limited to the field of activity of the commercial establishment.


Written by Nezha BELKHADIR Legal Manager

The carrying of shares is the agreement by which, the bearer acquires the shares at the request of the principal, it being expressly agreed, that after a certain period of time, theses shares will be retroceded to a designated beneficiary who can be either a third party or the principal himself and for a price agreed in advance.

The carrying agreement allows, on one hand, to discharge the principal of the ownership of the shares for a determined period by transferring them to the bearer, and on the other hand, to assure the principal a certain control on the shares during the duration of the carrying, as well as their appropriation at the end of this period.

1.The parts of the carrying agreement :

  • The principal : This is the shareholder who will transfer all or part of his shares to the bearer ;
  • The bearer : This is the assignee of shares transferred by the principal;
  • The beneficiary of the agreement : This is the person who the bearer will retrocede the acquired shares at the request of the principal, who can be either a third party or the principal.

2.The objectives of the carrying of shares :

  • The principal can use the carrying of shares because he doesn’t have sufficient liquidity to own the shares ;
  • The carrying of shares can also be a solution for the conflicts between the shareholders in the management of the company ;

In this situation, the carrying agreement consists in transferring the property of a part of the shares to a trusted third party who will play the role of arbitrator until the resolution of the dispute ;

  • The principal can also use the services of a bearer if he doesn’t want to reveal immediately his identity of the shareholder of the company.

3.The steps to implement the carrying agreement

  1. The conclusion of the agreement : The carrying agreement is concluded between the principal and the bearer. The purpose of this agreement is to determine and fix the relations of the parties during the duration of carrying ;
  2. The acquisition of shares by the bearer : The bearer buys the shares from a third party or from the principal himself, and then becomes a shareholder of the company, in accordance with the conditions initially agreed between the parties ;
  3. The carrying of shares : During the carrying of shares provided by the agreement, the bearer exercises all the prerogatives attached to the status of shareholder ;
  4. Transfer of shares to the final buyer : The bearer will retrocede the shares to the final buyer at the price fixed in advance in the contract. The final purchaser can be the principal or a third party defined in the carrying agreement.


Written by Nezha BELKHADIR Legal Manager