Writing By Hanane Belaskri

16.01.2023 | Bh Adviser | Morocco

Tax guide for Moroccans living abroad (MRE)

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If you are a Moroccan living abroad and you need information on taxation in Morocco, we recommend that you attend the open days organised by the Directorate General of Taxes during the months of July and August each year. These meetings take place on their premises and aim to provide information on Moroccan taxation as well as on all the measures taken by the State to facilitate the economic reintegration of MREs. A telephone information centre has also been set up on 05 37 27 37 27.

Registration duty in morocco

Case of constructed real estate

The reduced registration duty rate of 4% is applicable to any holder of real estate for residential, commercial, professional, or administrative use.

Credit institutions or similar bodies holding premises used for commercial or financial purposes under a “Murabaha”, “Ijara Mountahia Bitamlik” or “Moucharaka Moutanakissa” contract also benefit from the rate. Similarly, all land on which these premises are built is subject to the 4% rate.

The 3% rate is applicable to the first sale of social housing and housing with low property value.

Good to know We remind you that social housing is a housing unit whose surface is between 50 and 80m² with a cost lower than 250.000 dirhams excluding tax.
A low-value housing is a housing unit with a surface area of between 50 and 60m² and a first sale cost of fewer than 140,000 dirhams.
The rate of 1.5% concerns declarations that are made online by the donees, whether between spouses or siblings. This rate also concerns the declaration between the person providing the kafala and the child in care by the provisions of law n°15-01.
Case of land
The rate of 5% is applied to deeds and agreements concerning the acquisition of land, whether for money or free of charge, whether for land on which buildings are to be destroyed or for bare land.

Good to know All deeds must be registered within thirty (30) days from the date of issue to avoid penalties and surcharges.
Stamp duty
All children under the age of 18 are exempt from stamp duty for the biometric passport.

Application for release of a mortgage in morocco

The application for a release of mortgage concerns owners of social housing who have granted a first or second mortgage to the state. You can obtain the release by applying to the tax authorities in your place provided that the following documents are available:

An Application for Information on a specific form.
A copy of your contract of sale (preferably a copy).
A copy of your national identity card with the address of the house to be mortgaged
or simply a residence card.
A copy of your CST payment slips.

Self-delivery of construction of principal residence in morocco

The social solidarity contribution concerns housing units with a surface area of less than 300m².

If the surface area exceeds 300m², the owner of the dwelling is liable to pay the contribution on the entire surface area covered.

Scale

A scale is established to determine the amount of the social solidarity contribution on self-deliveries of residential construction.

The invoice reference or accounting statements (for turnkey constructions).
The name and surname for natural persons, and the company name for companies.
The payment method is chosen and the references.
The fiscal identifier and the common identifier of the company.
The amount is exclusive of tax on the added value.
The activity, the type of services.
The amount of tax on the invoice.

Good to know The cost of the work must be certified by an architect for the declaration filed for the first year
All personal construction operations for which a building permit is issued from 1 January onwards must declare their cost.
Subsequent declarations must report the cumulative cost of the work carried out.
The common price of the development has to don't forget the final announcement of the 12 months wherein the construction allows became obtained.

Declaration of the social unity contribution in morocco

Your announcement has to be made on a shape to the tax collector for your locality at an identical time because of the payment.

You have to upload the files that allow living, the floor region protected, and the applicable contribution.
The closing date for filing the announcement is ninety days from the date of difficulty of the housing allowance.

Good to realize The social unity contribution to self-deliveries of production does now no longer observe in housing constructed every so often and whose floor region is much less than 300m²

Council tax in morocco

Council tax applies to main and secondary dwellings. This tax is based on the rental value of the dwelling and is determined by the census commission. The rental value of housing is increased by 2% every 5 years.

Any Moroccan living abroad benefits from an abatement of 75% of the rental value. This abatement concerns the main dwellings. And concerning the housing tax, you are exempted for 5 years.

To give you a clearer idea of the scale, here is a summary table:

It should also be noted that the MRE has certain obligations in terms of housing tax:

He is obliged to declare the end of the construction work for all constructions or additions. This declaration must be made no later than 31 January of the year following the end of the work. Any change of ownership or use of buildings must also be declared by 31 January of the year following the change.

Another declaration must also be made for any owner or usufructuary of buildings that are already subject to council tax. If your dwellings are vacant or undergoing major repairs, you must file a vacancy declaration specifying the reason for the vacancy.

Municipal service tax in morocco

The municipal services tax applies to buildings, regardless of their purpose. If the building is used as a main residence, the owner benefits from a 75% reduction in the rental value.

The applicable rates are as follows:

Premises located in urban municipalities, delimited centres and resorts are subject to a rate of 10.50% of the rental value.
Premises located within urban municipalities are subject to a rate of 6.50% of the rental value.

Good to know In the event of the completion of building work or changes, you are subject to the same reporting obligations as those laid down for the taxes habitation concerning the TSC.
For council tax, you do not benefit from a five (5) year exemption.

Revenue tax in morocco

Case of a retirement pension from foreign sources

Foreigners who have decided to settle in Morocco benefit from an allowance of 60% or 40% on their pension, depending on the case, and a reduction of 80% of the amount of tax. However, for these benefits to apply, the pension must be transferred to Morocco permanently and in dirhams. We also remind you that the transfer must be made in non-convertible dirhams. It is also important to file the previous year’s income tax return and pay electronically.

Case of property income in morocco

The invoice reference or accounting statements (for turnkey constructions).
The name and surname for natural persons, and the company name for companies.
The payment method is chosen and the references.
The fiscal identifier and the common identifier of the company.
The amount is exclusive of tax on the added value.
The activity, the type of services.
The amount of tax on the invoice.

You are subject to income tax on any income earned from renting out a home or making it available free of charge to third parties. However, the amount of gross annual property income that does not exceed 30,000 dirhams is exempt from income tax.

Rates and Duties in morocco

Rates of earnings tax implemented to assets earnings:

10% if the gross land earnings are much less than 120 000DHS.
15% if earnings are more than or identical to a 120 000DHS.

The assertion of the IR ought to be completed earlier than the third month of every consecutive yr, consequently earlier than March following the yr wherein the earnings become acquired. We additionally remind you that the assertion ought to be made with the aid of using digital means, indicating

The gross quantity of the once-a-year rent.
The surnames and primary names of the individuals renting.
The quantity of tax withheld at source.
The vicinity of every construction and the CST tax object number.

Case of IR on land products in morocco

In the case of the disposal of land, income tax applies to the land proceeds acquired. However, an exemption applies in the case where the land profit has been realised on the disposal of a building that has been occupied as a dwelling for more than six months. Similarly, an exemption applies if the value of the property transfers does not exceed 140 000 DHS in the calendar year. This exemption also applies to the disposal of buildings or parts of buildings that have been acquired by way of “Ijara Mountahia Bitamlik”.

The tax rate in morocco

A rate of 20% is applied to the profit made on the disposal of real estate. However, the property must have been built before the period for granting the exemption expired. A minimum rate is also applied in the absence of profit and is worth 3% of the transfer price for all transfers exceeding 4 million dirhams.

Good to know All property profit declarations must be made electronically. The same applies to payment, which can also be made online.

VAT refunds for Moroccans living abroad

To benefit from this refund, the purchase must meet certain criteria:

The sale or purchase must not be for commercial use and must have been
made on a single day with the same seller for an amount of 2000 DHS (including VAT).
After the sale, the seller must agree to carry out the formalities so that the customer
is entitled to a refund of the VAT. For this to happen, the seller must himself be liable for VAT.

All goods and merchandise purchased must leave Morocco within three months of purchase and must be in the buyer’s luggage.
It is also imperative to fill in an export sales note (1 original copy + 3 copies) at the time of purchase, which will allow it to cross the borders. A tax administration form must also be filled out and accompanied by the purchase invoices which mention all the legal information on the seller.

Once all the formalities have been complied with at the border, the administration will refund the VAT by bank transfer, deducting the transfer costs.

Good to know Good to know The request for a VAT refund must be made only by a natural person who is on a short stay in Morocco and who is not a resident.
Likewise, the person must present the goods to the customs as well as the vouchers justifying the purchase.