The corporation tax rate in Morocco: 20 per cent or 35 per cent

The Moroccan press has given extensive coverage to an OECD report on “Corporate Tax Statistics”, according to which Morocco is bucking global trends by raising its corporation tax rate, even reaching a record high of 35 per cent.

I must admit, that’s when my eyes started to glaze over. A 35 per cent corporation tax rate, when the aim of the 2023 tax reform was to harmonise the corporation tax rate at 20 per cent?

So I rushed to my General Tax Code, which is more precious to me than the latest best-selling crime novel.

And I was reassured.

The corporation tax rate is 20 per cent

Article 19 of the General Tax Code stipulates that:

The corporation tax rate is set at: 20 per cent

With higher tax rates for very large companies

But he adds:

35 per cent, in the case of companies whose net profit is equal to or greater than one hundred million (100,000,000) dirhams, excluding:

service companies with ‘Casablanca Finance City’ status that benefit from the tax regime set out in Article 6 above;

companies operating in the industrial development zones referred to in Article 6 (II-B-8°) above;

companies incorporated on or after 1 January 2023 which, under an agreement signed with the State, undertake to invest an amount of at least one billion five hundred million (1,500,000,000) dirhams over a period of five (5) years from the date of signature of the said agreement

40 per cent, in the case of credit institutions and similar bodies, Bank Al Maghrib, the Caisse de dépôt et de gestion, and insurance and reinsurance companies¹⁵³.

But this is nothing new: it dates back to 2023

Indeed, these tax rates were enshrined in the 2023 Finance Act. However, the way the OECD report is presented (or the content of the report itself) seems to suggest that Morocco is increasing its corporation tax rates this year.

According to *Les Echos*, an article which went into greater depth in its analysis than other newspapers:

The report highlights a “stabilisation” in statutory corporate tax rates since 2020, marking a break from two decades of continuous decline. The average combined rate across the 146 jurisdictions in the OECD and the Inclusive Framework stands at 21.2 per cent in 2026, the same as in 2020. However, a handful of countries have decided to buck the trend. Four jurisdictions have recorded increases of 1 percentage point each, namely South Korea, Lithuania, Morocco and San Marino. As a direct result, the Moroccan rate will rise from 34 per cent in 2025 to 35 per cent in 2026.

In fact, with a rate of 20 per cent, Morocco is below the average. And the rate for 2025 is the same as that for 2026, 2024 and 2023.

Around 150 companies are affected by this 35 per cent rate

We are familiar with the heavyweights of the Moroccan economy: OCP, which alone accounts for 20 per cent of total corporation tax revenue; Renault; ONEE; Maroc Telecom; Orange; Afriquia; Total; Label Vie; Marjane… In total, there are 150 companies that exceed the 100 million dirham profit threshold and account for 60 per cent of the corporate tax revenue.

Other countries impose additional taxes on large companies. For example, in 2022 Spain introduced a one-off tax on the turnover of large energy companies, which will enable the state to raise nearly “two billion euros” a year, as well as a 4.8 per cent levy on the net income (interest and commissions) of credit institutions. But this is not referred to as corporation tax, so it is not taken into account in the OECD’s analysis… which is illogical.

The so-called problem with tax treaties

The report shows that African countries have, on average, fewer than 20 bilateral treaties, compared with nearly 70 for OECD members. Without a legal basis to reduce these rates via a tax treaty, companies remain subject to domestic law. A French group wishing to repatriate dividends from Morocco will see this income taxed at around 11 per cent, and then reintegrated in France with a tax credit. If Morocco had signed more treaties aligned with the OECD model, this rate could be reduced to 5 per cent, or even 0 per cent.

The facts: Morocco has signed tax treaties with nearly 70 countries.

The last sentence is a bit odd, too. Basically, she’s complaining that Morocco is keeping its tax revenue! Yet the mechanism of withholding tax plus tax credit doesn’t actually cost the taxpayer anything in the end – it’s just a cash flow delay.

At a time when large corporations are engaging in extensive tax optimisation, enabling them to pay little or no tax in countries where they have a significant presence (for example, Total in France), I do not think we can criticise Morocco for taking steps to safeguard its tax revenue to some extent.

The investment decision: tax considerations or economic potential?

The end of the article is a lengthy and rather obscure lament about the lack of transparency and tax statistics needed to calculate the ‘effective tax rate’, which could therefore deter investors from Morocco.

So, first of all, you shouldn’t base an investment decision on tax considerations. If tax benefits are essential to your project’s profitability, it’s a bad project.

Secondly, Morocco is very clear about its aid mechanisms. It may not publish complex statistics, but as an investor interested in Morocco, you have all the advice you need:

the Regional Investment Centres
consultancy firms, such as ours
and for very large-scale projects – those expected to generate more than 100 million dirhams in profit – these are handled at government level.

A large company employs tax specialists and seeks advice. It is not going to decide where to locate its project simply because a statistic tells it that the effective tax rate in Morocco is lower or higher than that of its neighbours.

And for a small investor, it is first and foremost a lifestyle choice: to settle in Morocco and set up a business there so they can live there.

More information

Impôt sur les sociétés : le Maroc champion d’Afrique: An article in *Les Echos* analysing the OECD report… without correcting it. - in French

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