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.
Articles 127-I; 129-V-9; 136-III of Moroccan Tax Code.
Written by Ali SALIM TAX Manager