Withholding Tax on Service Fees in Morocco: What You Need to Know in 2025

In Morocco, international taxation continues to play a central role in the life of businesses. Every time a Moroccan company pays for a service provided by a foreign non-resident, one key question arises: should a withholding tax be applied? The answer is clear. Yes, the General Tax Code (Article 15) requires Moroccan companies to withhold tax before the funds even leave the country.

In 2025, this mechanism—often misunderstood—remains at the heart of tax audits and discussions between taxpayers and the administration. It is a powerful tool for securing the Kingdom’s tax revenues, but it can also take companies by surprise if they are not well prepared.

The applicable rate: 10% of the gross amount

In practice, the general rule is simple: a Moroccan company paying for services rendered by a foreign supplier must withhold 10% of the gross amount and remit this sum to the Moroccan tax authorities.
The rule applies regardless of the currency or payment method: whether the payment is made in dirhams, euros, or via SWIFT transfer, the withholding tax applies in the same way.

Example:
A Moroccan company hires a consultant based in Paris for a mission worth MAD 100,000. At the time of payment, it must withhold MAD 10,000 for the tax authorities and only transfer MAD 90,000 to the consultant. The MAD 10,000 must then be declared and paid to the Treasury during the following month.

Heavy responsibility for the Moroccan company

The responsibility for withholding and remitting the tax lies with the Moroccan company making the payment. In other words, it effectively becomes a tax collector for the State.
In case of omission, the Moroccan entity will bear the full cost, along with penalties and surcharges. Put simply, if the withholding is not applied, the tax administration will demand the unpaid tax directly from the Moroccan company, even if the foreign service provider has already received full payment.

Tax treaties: protection but also complexity

The situation changes when a bilateral tax treaty applies. Morocco has signed more than 65 tax treaties with partner countries, including France, Spain, the Netherlands, and Canada. These treaties can reduce the withholding rate, or even eliminate it entirely, provided the foreign service provider can present a valid tax residency certificate.

The most famous example is Booking.com, a Dutch company. In 2015, the Moroccan tax authorities confirmed that commissions invoiced to Moroccan hotels were not subject to withholding tax thanks to the Morocco–Netherlands tax treaty. But caution is required: this interpretation does not automatically apply to all platforms. In the case of Expedia or other providers, the standard 10% rule usually prevails.

Common real-life scenarios

In practice, the corporate withholding tax applies to a wide variety of service payments:

Firstly, consulting fees billed from abroad,
Secondly, technical or IT services delivered remotely,
Thirdly, intra-group service fees for management or technical assistance,
Finally, booking platforms and online marketplaces.

Some of these payments are often reclassified by the tax authorities as “royalties”—a broad concept that goes well beyond simple commissions. In such cases, even if a treaty exists, the withholding tax may still apply.

Costly mistakes to avoid

Too many companies face reassessments for basic mistakes. The most common include:

assuming withholding tax does not apply because the payment is made in foreign currency,
ignoring the existence of a tax treaty,
failing to request a tax residency certificate from the foreign supplier,
filing incomplete or late tax returns.

These oversights can transform a compliance formality into a significant financial risk.

A strategic issue for 2025

In 2024, withholding taxes generated more than MAD 31 billion in tax revenues for the Moroccan State. This figure highlights the importance of the mechanism and explains why it remains a top priority for the tax administration.

For companies, the message is clear: withholding tax is not optional—it is mandatory. Businesses must therefore anticipate every international transaction, verify the applicable rules, and document all payments carefully.

Conclusion

Withholding tax on service fees in Morocco is not just a technical rule. It is a daily reality that can impact the profitability of a contract and the relationship with a foreign supplier.
To avoid unpleasant surprises, businesses should:

apply the 10% rate set by the General Tax Code,
respect filing deadlines,
check whether a tax treaty applies,
keep all supporting documents.

In today’s environment, where international taxation is becoming more complex and audits are intensifying, caution remains the best strategy. It is better to apply the rule upfront than to correct mistakes under the pressure of a tax reassessment.

👉 This article is for informational purposes only and does not replace tailored tax advice. For a personalized review of your international operations, the experts at Upsilon Consulting are available to assist you.