In brief: Taxable income — the basis for corporate tax (IS) calculation — is obtained by adjusting accounting profit through add-backs (non-deductible expenses) and deductions (non-taxable income). The formula is set by Article 8 of the CGI: Taxable income = Accounting profit + Add-backs − Deductions. The applicable IS rates in 2026 are 20% (profit < MAD 100M) and 35% (profit ≥ MAD 100M).
What Is Corporate Tax in Morocco?
Corporate tax (IS) is a direct tax levied on profits earned by legal entities operating in Morocco. It applies to LLCs, SAs, SASs, general partnerships that have opted in, branches of foreign companies and permanent establishments.
IS has been proportional since the 2023 Finance Law reform: a single rate applies to the entire net taxable income, replacing the former progressive bracket system.
IS Rates in Effect in 2026
| Net taxable income | IS Rate |
|---|---|
| < MAD 100,000,000 | 20% |
| ≥ MAD 100,000,000 | 35% |
| Financial sector (banks, insurance, CDG, BAM) | 40% |
Companies with CFC or Free Zone status benefit from the 20% rate after their exemption period, regardless of profit level.
Accounting Profit: The Starting Point
Accounting profit is the difference between revenue and expenses recorded in the company’s books in accordance with Moroccan accounting standards (CGNC). It appears in the Income Statement (CPC).
Accounting profit = Revenue − Expenses
This result — whether profit or loss — does not directly constitute the tax base for IS. Fiscal adjustments must be applied.
From Accounting Profit to Taxable Income: The Adjustments
Article 8 of the CGI defines taxable income as the excess of operating revenue, profits and gains over expenses incurred or borne. In practice, it is obtained through the reconciliation table:
Taxable income = Accounting profit + Add-backs − Deductions
Fiscal Add-Backs
Add-backs are expenses recorded in the accounts but not deductible for tax purposes. They increase taxable income. Main categories:
- Fines and tax penalties: any sanction for legal or regulatory violations (Art. 11-I)
- Corporate tax itself: IS is not deductible from the income used to compute it
- Excess depreciation on passenger vehicles: deduction is capped at MAD 400,000 TTC over 5 years, i.e. MAD 80,000/year (Art. 10-I-F, as amended by the 2025 Finance Law)
- Cash payments: non-deductible beyond MAD 5,000 per day per supplier (MAD 50,000/month)
- Unsubstantiated expenses: expenses lacking proper supporting documentation
- Promotional gifts: deductible only if unit value ≤ MAD 100 and bearing the company name/logo
- Non-qualifying donations: donations to recognised public utility associations are fully deductible; donations to social welfare funds are capped at 0.2% of turnover (excl. VAT)
- Current account interest exceeding the regulatory rate or the paid-up capital base
Extra-Accounting Deductions
Deductions are revenue recorded in accounts but not taxable or specific tax advantages. They reduce taxable income:
- Dividends received from Moroccan companies: 100% exemption (parent-subsidiary regime, Art. 6-I-C-1°)
- Capital gains abatement on asset disposals: 70% if reinvested within 3 years
- Provisions no longer required: already taxed upon accounting reversal, they are deducted if previously added back
- Regulated provisions under special regimes
Minimum Contribution (Cotisation Minimale)
Even when taxable income is nil or negative, the company owes a minimum contribution (CM):
- Rate: 0.25% of operating revenue + financial income + subsidies
- Minimum: MAD 3,000
- Exemption: first 36 months of activity (Art. 144-I-D)
If the computed IS is less than the CM, the company pays the CM. The excess CM over IS can be offset against IS over the following 3 fiscal years.
Provisional Instalments
IS is paid through 4 provisional instalments, each equal to 25% of the previous year’s IS (or CM). Deadlines fall before the end of the 3rd, 6th, 9th and 12th months of the fiscal year.
The final settlement occurs when filing the annual return on the SIMPL portal, by March 31 at the latest.
Simplified Example
| Item | Amount (MAD) |
|---|---|
| Accounting profit | 1,500,000 |
| + Add-backs (fines, excess vehicle depreciation, cash expenses) | 180,000 |
| − Deductions (dividends — 100% exemption) | 200,000 |
| = Taxable income | 1,480,000 |
| IS (20% × 1,480,000) | 296,000 |
| CM (0.25% × 12,000,000 in revenue) | 30,000 |
| IS payable (IS > CM) | 296,000 |
Accounting Obligations (Art. 145 CGI)
Taxable income determination relies on proper accounting records including:
- Balance sheet and income statement (CPC)
- Cash flow statement (ETIC)
- Supplementary information statement
- Detailed inventory of closing stock
Failure to comply may lead to the rejection of accounting records by the tax administration during a tax audit.
Download Our Complete Guide
For an in-depth analysis with references to CGI articles and Circular Note No. 717, download our practical guide:
Download the Guide — Corporate Tax Base Determination (PDF, 21 pages)
Reference texts: General Tax Code 2026 (PDF) — Circular Note No. 717 — IS & IR (Volume 1)
Frequently Asked Questions
What is the difference between accounting profit and taxable income?
Accounting profit is the difference between revenue and expenses under CGNC standards. Taxable income is obtained after adjusting accounting profit through add-backs (non-deductible expenses) and deductions (non-taxable income), in accordance with Article 8 of the CGI. Taxable income is the basis for IS calculation.
What are the main fiscal add-backs in Morocco?
The most common add-backs are: corporate tax itself, fines and penalties, excess depreciation on passenger vehicles beyond MAD 400,000 TTC, cash payments exceeding authorised thresholds, unsubstantiated expenses and non-qualifying donations.
How is the minimum contribution calculated?
The minimum contribution is 0.25% applied to the sum of operating revenue, financial income and subsidies, with a floor of MAD 3,000. It is due even in case of a loss, except during the first 36 months of activity.
Can taxable income differ from accounting profit even without accounting errors?
Yes — this is standard practice. Accounting standards (CGNC) and tax rules (CGI) serve different purposes. Some expenses that are perfectly valid in accounting are not deductible for tax purposes (fines, IS itself), and some recorded income is not taxable (dividends under the parent-subsidiary regime). The reconciliation table formalises these differences.
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