Finance bill 2023 : New corporate tax rates
The draft finance law for 2023 in Morocco (Finance Bill 2023) has introduced a series of reforms to the tax system. Indeed, the promulgation of some measures is likely to completely change the taxation system that we have known for a long time.
In this article, Upsilon Consulting proposes to summarize the main tax measures of the Finance Bill 2023 regarding the corporate income tax rates.
Objective of the recasting of the corporate income tax rates in the Finance Bill 2023 in Morocco
According to the presentation document of the measures, the recast of the corporate income tax rates for objectives:
- First, the elimination of the variability of the proportional standard rate according to the tax result and its replacement by a unified standard rate of common law.
- Secondly, the suppression of the preferential regimes applied to the industrial acceleration zones and to CFC.
- Thirdly, the elimination of the difference between the rates applied to local and export sales.
- Fourthly, the improvement of the contribution of large companies with a net profit of more than MAD 100 million.
- Finally, the improvement of the tax contribution of credit institutions and similar organizations.
Finance bill 2023 – Modification of the tax rates for corporate income tax – Common law system
The finance bill 2023 suggests a progressive modification of the corporate tax rates. Indeed, the announced objective of this bill is the gradual convergence towards a unified common law rate of 20%.
Currently, the common law rate corresponds to a progressive scale that varies between 10% and 31%.
The new rates proposed in the 2023 Finance bill are as follows:
| Net income level | Current rates | Finance bill 2023 proposal | |||
| 2022 | 2023 | 2024 | 2025 | 2026 | |
| Less than or equal to 300 000 | 10% | 12.5% | 15% | 17.5% | 20% |
| From 300 001 a to 1 000 000 | 20% | 20% | 20% | 20% | 20% |
| From 1 000 000 to 99 999 999 | 31% | 28,75% | 25.5% | 22,75% | 20% |
| Equal to or higher than 100 000 000 | 31% | 32% | 33% | 34% | 35% |
Finance bill 2023 – Specific regimes
In addition, the project proposes to revise the current corporate income tax rates, which are limited in scope, towards unified rates. These are, in particular:
- Firstly, companies exporting products and services.
- Secondly, hotel companies and tourist entertainment establishments.
- Thirdly, the mining companies exporting.
- Fourthly, the artisanal enterprises.
- Fifth, private educational or professional training institutions.
- Sixth, sports companies.
- Seventh, real estate agents (legal entities) for income from the rental of university buildings, residences and campuses.
- Eighth, taxable agricultural holdings
- Lastly, companies performing service outsourcing activities.
The new rates proposed in the 2023 Finance bill are as follows:
| Net income level | Current rates | Finance bill 2023 proposal | |||
| 2022 | 2023 | 2024 | 2025 | 2026 | |
| Less than or equal to 300 000 | 15% | 16,25% | 17.5% | 18,75% | 20% |
| From 300 001 to 1 000 000 | 15% | 16,25% | 17.5% | 18,75% | 20% |
| From 1 000 000 to 99 999 999 | 15% | 16,25% | 17.5% | 18,75% | 20% |
| Equal to or higher than 100 000 000 | 15% | 20% | 25% | 30% | 35% |
Revision of the rates for companies located in industrial acceleration zones and CFCs
The project proceeds to maintain the five-year exemption for these companies. However, these companies benefited from a specific rate set at 15% after the exoneration period:
- First, for companies operating in industrial acceleration zones, beyond the five (5) year exoneration period,
- Secondly, for service companies with “Casablanca Finance City” status, in accordance with the legislation and regulations in force, beyond the five (5) year exoneration period.
The 2023 Finance Plan proposes to revise the current tax rates as follows:
| Net income level | Current rates | Finance bill 2023 proposal | |||
| 2022 | 2023 | 2024 | 2025 | 2026 | |
| Less than or equal to 300 000 | 15% | 16,25% | 17.5% | 18,75% | 20% |
| From 300 001 to 1 000 000 | 15% | 16,25% | 17.5% | 18,75% | 20% |
| From 1 000 000 to 99 999 999 | 15% | 16,25% | 17.5% | 18,75% | 20% |
| Equal to or higher than 100 000 000 | 15% | 20% | 25% | 30% | 35% |
Revision of rates for industrial companies
In 2022, industrial companies benefited from a rate of 26% (when the result was less than MAD 100 million).
The 2023 Finance Bill proposes to revise the I.S. tax scale as follows:
| Net income level | Current rates | Finance bill 2023 proposal | |||
| 2022 | 2023 | 2024 | 2025 | 2026 | |
| Less than or equal to 300 000 | 10% | 12.5% | 15% | 17.5% | 20% |
| From 300 001 to 1 000 000 | 20% | 20,00% | 20,00% | 20,00% | 20% |
| From 1 000 000 to 99 999 999 | 26% | 24.5% | 23% | 21.5% | 20% |
| Equal to or higher than 100 000 000 | 31% | 32% | 33% | 34% | 35% |
Finance bill 2023 – Review of the tax rate for credit and insurance companies
In 2022, the corporate tax rate is 37% for:
- Firstly, credit institutions and similar organizations,
- Secondly, Bank Al Maghrib,
- Third, the deposit and management fund, and
- Fourth, insurance and reinsurance companies.
The PLF 2023 proposes to increase the tax rate applicable to these institutions gradually to 40%.
The new tax rates for these companies are as follows:
| Net income level | Current rates | Finance bill 2023 proposal | |||
| 2022 | 2023 | 2024 | 2025 | 2026 | |
| Applicable rate | 37% | 37,75% | 38,50% | 39,25% | 40% |
Installment payments
As a transitional measure, the instalments due for each fiscal year opened during the period from January 1, 2023, to December 31, 2026, are calculated according to the corporate income tax rates applicable to that fiscal year.
Read in french : PLF 2023
