Key takeaways
- Corporate tax follows a progressive scale converging towards unified target rates.
- Income tax on salaries is withheld at source and paid monthly by the employer.
- VAT has a standard rate of 20%, with reduced rates converging.
Corporate income tax (IS)
Capital companies are automatically subject to corporate tax. Since the reform initiated by the 2023 Finance Act, rates are converging progressively towards target rates: a 20% standard rate, 35% for profits of 100 million dirhams or more, and 40% for credit institutions and similar entities.
Corporate tax is paid through quarterly instalments, with a final settlement upon the annual return filed within three months of year-end. A minimum contribution, based on revenue, remains due even in the absence of profit.
Income tax on salaries
Income tax owed by employees is withheld at source by the employer and paid over monthly. The scale is progressive; it was revised by the 2025 Finance Act, raising the exempt bracket and bringing the top marginal rate down to 37%. Moroccan payroll combines this withholding with social contributions — the two are handled together.
VAT
The standard VAT rate is 20%. Reduced rates apply to certain goods and services, with a convergence path set by recent Finance Acts towards two main rates (10% and 20%). Returns are monthly when taxable revenue reaches one million dirhams, quarterly below.
Points to watch
Invoicing obligations, withholding taxes on certain payments (dividends, interest, fees paid to non-residents), international tax treaties: Moroccan taxation changes with every Finance Act. The rates and thresholds cited here should always be checked for the current year — which is precisely what our watch is for.
This article provides general information based on Moroccan regulations at the date of publication. It does not constitute personalised advice — rates, thresholds and rules change with each Finance Act. Contact the firm to review your specific situation.