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, 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 fee of 1.5%. In practice, the following cases can be observed:

Advances on shareholders’ current accounts Application of Registration Duties
1.      Existence of a written agreement regarding current account advances between the partner and the company. The agreement specifies the sum advanced and the repayment date. RD of 1.5% liquidated based on the sums expressed in the agreement.
2.      Existence of a written agreement regarding current account advances between the partner and the company. The agreement indicates the sum advanced but without specifying a due date. RD of 1.5% liquidated based on the sums expressed in the agreement. The mention of the due date or repayment date has no impact on the treatment of registration duties.
3.      Existence of a written agreement regarding current account advances between the partner and the company. The agreement does not mention neither the amount advanced nor the due date/repayment date. Where the current account advance agreement does not mention the sum advanced, the tax authorities shall determine the taxable basis through an assessment taxation procedure. The mention of the due date or the repayment date has no impact on the treatment of registration duties.
4.      Existence of advances on shareholders’ current account that are not covered by a written agreement between the partner and the company. The contracting parties must make a detailed declaration to the tax inspector for registering the operation.


It should be noted that the contracting parties should complete the registration formality within 30 days as from the date of completion of the advance operation.

Legal references: 

Articles 127-I-A-2°; 133-I-C-5°; 136-I and 228-I-2° of the Moroccan Tax Code.


Written by Ali SALIM  Manager TAX

In the context of the current pandemic crisis, the protective measures adopted at the global level, while certainly beneficial from a health point of view, have had serious consequences on the economies of countries, since many companies, particularly small and medium-sized enterprises, were forced to suspend their activities, and as a result found themselves in great difficulty (stoppage of orders, economic layoffs, loss of turnover, increased debt levels, failure to comply with restrictive clauses, increased difficulties in accessing additional credit, etc.). Thus, this situation related to COVID-19 could create new or exacerbate existing going concern problems.

Going concern principle

The concept of “fact of such a nature as to compromise, the continuity of the operation of the business, as it emerges from the provisions of Article 547 of Law 15/95 forming the Commercial Code, has come back to the forefront and deserves special consideration both by business managers and by the accounting profession.

According to Moroccan accounting standards (CGNC), under the assumption of the “going concern principle”, the company must prepare its financial statements with a view to the normal pursuit of its activities. Therefore, in the absence of any indication to the contrary, it is expected to prepare its financial statements without the intention or obligation to go into liquidation or to significantly reduce the scope of its activities.

In the event that the conditions for a total or partial cease of activity are met, the going concern assumption must be abandoned in favour of the liquidation or disposal assumption. »

Role of the External Auditor

The statutory auditor, as the supervisory body that guarantees the fairness of the financial information emanating from a company, has an important preventive role, as it is well placed to detect the first signs of deterioration in the company’s situation. The provisions of Article 547 of the French Commercial Code specify that: “The statutory auditor, if any, (…) shall inform the head of the company of any facts likely to compromise the continuity of the company’s operations”.

As the occurrence of the pandemic crisis coincided with the period of the closures/approvals of the annual accounts, the auditor’s alert must set out the consequences of the pandemic and specify the reasons why it would compromise the continuity of the company’s operations for the current financial year and the following financial year.

Finally, after a specific analysis of the situation, the managers must draw up a plan of measures to mitigate the possible consequences of the pandemic which may lead to the operation of the company being called into question (modification of the share capital, transformation of the legal form of the company, reduction of the workforce, search for new partners, etc.).

The auditor is in turn required to:

– assess the action plans established by management against its going concern assessment, and determine whether the implementation of these plans is likely to improve the situation and whether the plans are feasible in the circumstances;

– review the cash flow forecasts prepared by management and assess the reliability of the underlying data and the justification of key assumptions;

– assess emergency financial assistance and other forms of support offered by the State to the entity and its employees;

– evaluate credit facilities and repayment terms;

Collective  proceedings

Collective procedures have been provided for by the provisions of Book V of the Commercial Code, can be a real solution if they are applied at the right time.

Indeed, Book 5 offers a whole range of procedures for dealing with business difficulties, tailor-made to suit the needs of the company:

– External prevention: the aim is to anticipate the difficulties of enterprises in order to better control them by appealing in particular to the president of the court, who may, if he deems it useful, appoint a special agent to help the head of the enterprise to find possible solutions for recovery (establishment of a dialogue between the head of the enterprise and his staff, obtaining payment deadlines from the partners of the enterprise).

– The conciliation procedure: considered to be the last phase before the opening of legal proceedings, the conciliation procedure enables the managers of companies in difficulty to find simple, quick and discreet amicable solutions to redress the situation of their companies. Its main advantage is that it allows for a temporary stay of proceedings, allowing a company director who is unable to pay most creditors to apply to the president of the court for a temporary stay of proceedings initiated by his creditors, which gives him time to prepare a plan for the company’s recovery. This suspension measure also prohibits any possibility of execution by creditors on the company’s movable and immovable property.

The safeguard procedure: this procedure aims to help firms encountering difficulties, which they are unable to overcome, which could lead to suspension of payments. The president of the court, after hearing the head of the enterprise, designates procedural bodies (a trustee and a bankruptcy judge), whose objective is to help the head of the enterprise to prepare a safeguard plan that will enable the enterprise’s situation to be redressed. The safeguard plan specifies the commitments necessary to maintain the operation of the enterprise and the means to finance it, as well as the guarantees granted for the execution of the draft safeguard plan. The court sets a period of 5 years for the execution of the safeguard plan during which it can benefit from the stay of individual proceedings.

Reorganisation proceedings: initiated either at the request of the debtor, or by one of the creditors or by the court. It guarantees (i) the protection of the company’s assets (taking protective measures and maintaining all the actions necessary to preserve the company’s rights against its debtors and to preserve its production capacities) (ii) the continuation of current contracts (lease contracts, provision of services, etc.) and (iii) the non-transferability of the corporate rights of managers.

Written by Imane BENABOUD  TAX Manager

Prior to the Moroccan Finance Act 2020, exporting companies were granted the following tax benefits for their export sales:

  • Total exemption from the Corporate Income Tax (CIT) for a period of 5 consecutive years starting from the financial year in which the first export transaction was carried out;
  • and the application of the reduced CIT rate capped at 17.50% beyond this period.

The Finance Act 2020 amended the export tax system as follows:

  • the removal of the abovementioned five-years exemption for export turnover ;
  • and the increase in the capped corporate tax rate from 17.50% to 20%, in respect of export turnover.

Transitional measure:

As a transitional measure, exporting companies having carried out their first export operation before January 1st 2020 shall continue to benefit from the five-year exemption period until the expiry of the period of five consecutive years starting from the financial year during which their first export operation was carried out. Beyond this period, the said companies benefit for their export turnover from taxation at the rate of 20%.

In this respect, it should be noted that companies carrying out their first export operation as from January 1st 2020 do not benefit from the five-year exemption from corporation tax on their export turnover.

Also, the new rate of 20% applies to fiscal years beginning on or after January 1st 2020.


Legal references:

Articles 6 (I- B – 1° and I- D- 3°) and 19 (I-A-1°) of the General Tax Code.


Written by Ali SALIM  Manager TAX

The Finance Act for FY2020 published in Moroccan Official Gazette No. 6838 bis readjusted the progressive scale of corporate income tax (CIT) rates as follows:

  • Raising the corporate tax rate from 17.5% to 20% for the intermediate net profit bracket from MAD 300,001 to MAD 1,000,000.

Raising the rate of the scale capped at 20% (instead of 17.50%), applied to the net taxable profit greater than MAD 1,000,000 for the following companies:

    • Exporting companies (for more details, please refer to our article New Tax Regime for Exporting Companies“);
    • Hotel companies and tourist entertainment establishments ;
    • Mining companies;
    • Handicraft businesses;
    • Private educational or professional training institutions ;
    • Sports companies;
    • Real estate developers;
    • Agricultural companies ;
    • Companies carrying out services related to outsourcing/offshoring activities whether located inside or outside dedicated platforms for these activities.

Progressive CIT scale before FY2020:

Net Taxable Profit (in MAD) Rates Amount to be deducted
<300.00 10% 0
from 300.001 to 1.000.000 17,5% 22.500
> 1.000.000 31% 157.500


New Progressive CIT Scale applicable to fiscal years beginning as from January 2020:

Net Taxable Profit (in MAD) Rates Amount to be deducted
<300.00 10% 0
from 300.001 to 1.000.000 20% 30.000
> 1.000.000 31% 140.000


Legal references :

Articles 6 (I-B-3°; I-B-5°; I-D-1°; I-D-3° and I-D-4°); Ar 6 (II-B-4°; II-C-1°-b; II-C-1°-c and II-C-2°) and Ar 19-I-A of the Moroccan Tax Code.


Written by Ali SALIM  Manager TAX

Measures not yet official
First of all, it should be remembered that despite the numerous announcements and publications on this subject, there is no official text from the Tax Administration authorizing the postponement of declarations and payments. As a precautionary measure, we therefore recommend that for the time being you comply with the reporting obligations as at 31 March 2020 (PIT, CIT,  CIT Advance payments, etc.). We describe below the exact legal situation and the remaining grey areas.

Measures announced by the Economic Intelligence Committee
In view of the exceptional situation caused by the spread of the coronavirus pandemic, the Economic Watch Committee (CVE) chaired by the Minister of the Economy and Finance following its meeting on 19 January, decided to introduce a series of easing measures in favour of companies, SMEs and the liberal professions in difficulty. These measures include, inter alia, the possibility of postponing the filing of tax returns until 30 June 2020 for companies whose turnover for the 2019 financial year does not exceed 20 Millions of Moroccan dirhams, as well as the suspension of the payment of social security contributions until 30 June 2020. All the measures taken by the CVE are published on the website of the Ministry of Finance, for more information see the following link

We remind you that the measures announced do not have the force of law.

Decree-Law of 24 March 2020
Moreover, today, 24 March, the decree-law on the state of health emergency was published in the Official Gazette (attached the copy in Arabic, the only one available at the moment). Article 6 of the said decree stipulates that all the time limits provided for in the laws and regulations in force are suspended until the state of health emergency is lifted (i.e. 20 April 2020, unless extended). The only exception provided for by the provisions of the said article concerns the time limits for appealing to the Court of Appeal for persons prosecuted while in detention, as well as the periods of police custody and preventive detention.

Our reading and position of the Order of Chartered Accountants
According to our reading of the decree, all tax deadlines provided for in the CGI should be suspended since the aforementioned article does not provide for any exception to the provisions of the CGI. Nevertheless, this contradicts the CVE’s communiqué which provided for the possibility of deferring tax returns only for companies whose turnover does not exceed 20 MMAD (without specifying whether the suspension also concerns advance payments and other tax payment obligations).
This ambiguity led the Order of Chartered Accountants to refer the matter to the DGI as a matter of urgency in order to clarify the provisions of Article 6 of the abovementioned decree.

Consequently, we are of the opinion that it is more prudent to respect the filing and payment deadlines provided for by the CGI until the publication of an explanatory note by the DGI taking into account the current circumstances.

We remain at your disposal for any further information you may require.

In order to attract foreign direct investment, the Kingdom of Morocco created several Free Zones where investors can implement their businesses or plants and benefit from tax, customs and foreign exchange incentives.

Free Zones are areas dedicated to exporting industrial or commercial activities such as aeronautics, automotive and textile industries. In general, each Free Zone is specialized in a specific industry.

Tax incentives

Corporate Income Tax

·  A total exemption during the 5 first consecutive years starting from the date of beginning of the operations;

·  A reduced rate of CIT of 8,75% applicable during the following consecutive 20 years.

Withholding Tax on dividend

·  Dividend distributed to non-resident shareholders and derived from activities undertaken by the companies established in Free Zones is exempt from Withholding Tax on dividend.

Value Added Tax

·  Goods and services exported by the Free Zones are exempt from VAT;

·  Goods delivered and services rendered to companies established in Free Zones are exempt from VAT;

·  Transactions undertaken within or between Free Zones are exempt from VAT.

 Registration duties

·  Incorporation and capital increase of companies established in Free Zones are exempt from registration duties;

·  Acquisition by companies established in Free Zones of land necessary to the implementation of their investment.

Professional Tax

·  An exemption during the first consecutive 15 years of operations.

Customs incentives

Free Zones are considered under Moroccan Customs and Indirect Taxes Code as an out of scope territory.

As such, all flows between Free Zones and the foreign territories are not subject to customs duties and indirect taxes applicable to the transactions undertaken with foreign territories.

Foreign exchange regulation incentives

Foreign exchange regulation is not applicable to transactions undertaken in the Free Zones. Also, all payments should be made in foreign currency.

The use of Moroccan Dirhams (MAD) is authorized for:

·  The payment of wages due to the employees,

·  The payment for some services and furniture provided by persons established in the rest of the Moroccan territory within a limit of 5000 MAD per transaction and a cap of 150 000 MAD per year and per supplier.

For further information, please contact us