Tax on property income in Morocco
Effective Tax Rate on Rental Income |
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| Monthly Income | US$1,500 | US$6,000 | US$12,000 |
| Tax Rate | 10.70% | ||
| Click here to see a worked example | |||
Source: |
Disclaimer | ||
INDIVIDUAL TAXATION
Nonresidents are taxed only on their Moroccan-sourced income. Married couples are taxed separately.
INCOME TAX (Impôt Général sur le Revenu or IGR)
Taxable income includes the following: (1) business income, (2) wages and salaries, (3) agricultural income, (4) income and profit from rent, and (5) income and profit from movable capital. Income tax is generally levied on aggregate income at progressive rates.
INCOME TAX |
|
| TAXABLE INCOME, MAD (US$) | |
| Up to 30,000 (US$3,046) | |
| 30,000 - 50,000 (US$5,650) | 10% on band over US$3,046 |
| 50,000 - 60,000 (US$6,091) | 20% on band over US$5,076 |
| 60,000 - 80,000 (US$8,122) | 30% on band over US$6,091 |
| 80,000 - 180,000 (US$18,274) | 34% on band over US$8,122 |
| Over 180,000 (US$18,274) | 38% on all income over US$18,274 |
| Source: Global Property Guide | |
RENTAL INCOME
Net rental income is taxable under the general income at progressive rates. A standard deduction of 40% of the gross rental income covers the income-generating expenses in lieu of itemized deductions.
CAPITAL GAINS TAX (taxe sur les profits immobiliers or TPI)
Individuals earning capital gains from selling property are subject to tax on property profits. Profits on the sale of property are taxable at 20% of any profit, but with a minimum tax of 3% of the sale price. The taxable gain is computed by deducting the following from the selling price: acquisition price and incidental costs, transfer costs, investment expenses, and interest payments.
Capital gains from the sale of a property which has been the primary residence of the taxpayer are not subject to tax under some qualifications:
- The property has been the seller's primary residence for at least eight years
- The property has been the seller's primary residence for at least four years on the day of the sale, and the property area does not exceed 100 sq. m., and the profit does not exceed MAD250,000 (US$25,381)
- The profit made on one or more transfers by individuals within a calendar year whose total value does not exceed MAD60,000 (US$6,091)
PROPERTY TAX
Property Tax (Taxe d'habitation)
Property tax is assessed on the rental value of the property. The general property tax rate is 10% of the assessed rental value, as determined by the local tax authorities.
If the property is used as a primal residence, only 25% of the assessed rental property value is subject to tax. Properties occupied as a main or second residence are taxed at progressive rates.
PROPERTY TAX |
|
| TAX BASE, MAD (US$) | |
| Up to 5,000 (US$508) | |
| 5,000 - 20,000 (US$2,030) | |
| 20,000 - 40,000 (US$4,061) | |
| Over 40,000 (US$4,061) | |
| Source: Global Property Guide | |
New buildings are exempted from the tax for a 5-year period following completion.
CORPORATE TAXATION
INCOME TAX
Income and capital gains earned by companies are generally taxed at a flat rate of 30%. Income-generating expenses are deductible when calculating taxable income.
INCOME TAX |
|
| TAX BASE, MAD (US$) | |
| Up to 300,000 (US$30,457) | |
| 300,000 – 1,000,000 (US$101,523) | |
| Over 1,000,000 (US$101,523) | |
| Source: Global Property Guide | |