Debt Waiver in Morocco: Creditor and Debtor Tax Rules

In brief: In Morocco, a waived debt is taxable non-current income for the debtor (Art. 9-I-C-4° of the CGI 2026). For the creditor, the tax administration treats the waiver as a non-deductible liberality (Art. 11-IV; Circular Note 717). In 2026, both effects apply at each company’s corporate tax rate: 20%, 35% if net profit is equal to or greater than 100,000,000 DH, 40% for credit institutions and similar bodies, Bank Al-Maghrib, the CDG and insurance and reinsurance companies (Art. 19-I of the CGI 2026, subject to the exclusions and conditions it lays down). The CGI 2026 does not contain the expression “debt waiver”. The regime rests on general articles (8, 9, 10, 11, 144, 213) and on Circular Note No. 717 of April 2011. It must be distinguished from a loss on an irrecoverable receivable, which remains deductible when justified.

A debt waiver is a creditor’s voluntary renunciation of all or part of what it is owed: a bank write-down, a current-account waiver between group companies, a commercial remission granted to a customer. The general principle is set out in our guide to deductible expenses for corporate tax (IS) in Morocco; this article covers its most expensive exception.

What the CGI 2026 says about debt waivers

The principle. The law provides, in Article 8-I of the CGI 2026, that taxable profit is the excess of income over expenses “incurred or borne for the needs of the taxable activity”, determined under accounting rules and adjusted by tax law.

For the debtor. Article 9-I-C-4° lists “other non-current income” among taxable non-current income. This is the heading that receives the waived debt. Article 9-I-C-2° adds balancing subsidies. Article 9-II allocates subsidies and gifts received to the financial year of receipt; the company may, however, spread investment subsidies over the depreciation period of the assets they finance, or over ten financial years where they are allocated to the acquisition of land for carrying out investment projects.

For the creditor. Article 11-IV excludes from deductible expenses “the amounts of purchases and services of a gratuitous nature”. Article 10-III-B allows “other non-current expenses”, but the expressly deductible gifts are those made to the bodies listed in Article 10-I-B-2°, under the conditions provided for therein (Art. 10-III-B), and contributions, gifts or bequests paid on behalf of the State, deductible over several financial years (Art. 247 bis-I).

Doubtful receivables. Article 10-I-F-2° allows a provision for doubtful receivables provided legal action is brought within the twelve months following the month of its recognition. The conditions are detailed in our article on deductible provisions for corporate tax.

Related companies. Article 213-II, as worded by Finance Law no. 40-08 (2009), allows the tax administration to add back to taxable profit the profits indirectly transferred to a related company, in Morocco or abroad, “by increasing or reducing purchase or sale prices, or by any other means”. Article 213-V, introduced by Finance Law no. 73-16 (2017), makes transactions constituting an abuse of law unenforceable against the administration; they may be disregarded in order to restore their true character: those that are fictitious or aim solely at obtaining tax advantages contrary to the objectives pursued by the legislative provisions in force, and those that aim to evade tax or to reduce the amount that would normally have been borne, having regard to the actual situation of the taxpayer or of its activities, had those transactions not been carried out.

VAT. The law provides, in Article 95, that the chargeable event is collection, or invoicing (accrual) by option. Article 101-1° requires an adjustment of the tax deducted where the transaction “is not actually subject to tax”; Article 106-I-5° excludes from the right to deduct the tax charged on “purchases and services of a gratuitous nature”. Articles 104 and 107 to 114 say nothing about VAT on a waived or irrecoverable receivable.

Registration duties. Article 133-I-D-7° taxes at 1% “receipts, set-offs, waivers and all other deeds and documents releasing sums and securities”; these deeds are registered at the parties’ option (Art. 127-II), except where they fall under the compulsory registration of Article 127-I, in particular deeds drawn up by a notary or used by one (Art. 127-I-C-1°).

Key takeaways:

• The CGI 2026 does not contain the expression “debt waiver”: the debtor’s taxation rests on Article 9-I-C-4° (other non-current income).
• Article 11-IV of the CGI 2026 excludes from deductible expenses the amounts of purchases and services of a gratuitous nature.
• Corporate tax applies to the financial year opening on or after 1 January 2026 at a rate of 20%, 35% for net profit equal to or greater than 100,000,000 DH and 40% for credit institutions and similar bodies, Bank Al-Maghrib, the CDG and insurance and reinsurance companies, subject to the exclusions and conditions of Art. 19-I (Art. 19-I and 247-XXXVII-A).
• The waiver deed bears 1% registration duty (Art. 133-I-D-7°) only if it is presented for registration, at the parties’ option (Art. 127-II).

What the tax administration specifies: debtor, creditor, return to better fortune

The core doctrine is Circular Note No. 717 of April 2011, whose passages cited here remain valid in 2026. Circular Notes No. 729 to 737 add nothing new; Circular Note No. 736 (Finance Law 2025) only mentions “the value of deductible gifts and liberalities” among the questions of fact that may be covered by the amicable agreement (Art. 221 ter).

For the debtor: an exceptional gain

The administration specifies (Circular Note 717, volume 1, p. 113, § 4-4 “Gifts, liberalities and prizes received”) that the total or partial remission of a debt is an exceptional gain for the company that benefits from it. This gain is allocated to the financial year in which the remission became certain. A receivable written off as irrecoverable and later collected is taxable income of the year of collection (p. 113, § 4-3). A balancing subsidy is allocated to the year of collection and included in the minimum contribution (p. 112).

When shareholders bear losses, the liberality granted must be recorded as non-current income of the year; it cannot be charged directly against prior losses (Circular Note 717, volume 1, p. 190).

For the creditor: a liberality

The administration considers that a waiver granted is a non-deductible liberality (Circular Note 717, volume 1, p. 113). On page 187, under Article 11-IV, it defines a liberality as “any expense incurred outside the interest of the company” and expressly lists “debt waivers”, alongside interest-free advances to shareholders and remuneration without consideration. On page 169 (§ 2-5), it lists “the total or partial remission of a debt” among non-deductible liberalities.

Non-deductibility therefore results from the administrative classification, not from an express provision of the CGI. The Court of Cassation has held that the interpretation given in a DGI circular note (in that case No. 715) binds the administration with respect to taxpayers, under the principle of legitimate expectations (administrative chamber, judgment no. 601 of 9 July 2015).

A waiver granted in the company’s own interest: unresolved

If a liberality is an expense incurred “outside the interest of the company”, a waiver that the creditor shows to serve its own commercial interest could escape that classification, in light of Article 8-I. Outside credit institutions, no Moroccan doctrine reviewed expressly accepts this or sets conditions for it; for credit institutions, the DGI Circular Note of 3 February 2017 accepts the deduction of losses arising from an amicable arrangement involving a waiver, under the conditions it sets (see below). Circular Note 717 lists the waiver among liberalities without reservation. This route remains unresolved by the texts and should be approached with caution, backed by evidence of the company’s own interest.

The return to better fortune clause

A waiver with a return to better fortune clause remains taxable non-current income for the beneficiary (Circular Note 717, volume 1, p. 113). When the debtor later repays, the repayment is a deductible non-current expense for it (p. 114). The amounts recovered by the creditor are non-taxable non-current income for it (p. 169).

Not to be confused with a loss on an irrecoverable receivable

A loss on an irrecoverable receivable, which is involuntary, is treated differently:

• losses from the cancellation of receivables “recognised as definitively irrecoverable and duly justified”, of a non-current nature: deductible (Circular Note 717, volume 1, p. 168, § 2-4-a);
• losses on irrecoverable receivables of a recurring nature, linked to ordinary activity: other operating expenses (p. 144);
• losses on irrecoverable receivables linked to equity investments: other deductible financial expenses (p. 166, § 3-1).

Minimum contribution, VAT and registration

Minimum contribution. The administration reads Article 144-I-B as including, under “subsidies and gifts received”, operating subsidies (9-I-A-4°), balancing subsidies (9-I-C-2°) “and other non-current income” (9-I-C-4°) (Circular Note 717, volume 3, p. 2-3). On that reading, the waived debt enters the base.

VAT. Under the accrual regime, a receivable is accepted as irrecoverable when it is charged, with supporting documents, to a non-current expense account (Circular Note 717, volume 2, p. 89, § 3). The text says nothing about a refund of VAT already paid.

Registration duties. The creditor’s waiver is subject, at the parties’ option, to registration duty as a receipt, since it releases the debtor. The receipt duty is not due when the debtor’s release results from the law and not from the agreement of the parties, for example through limitation or merger (Circular Note 717, volume 2, p. 254). Where the transferor of company shares waives its shareholder current account in favour of the purchaser of the shares, the DGI classifies the transaction as an assignment of receivable, compulsorily subject to registration at the rate of 1.50% (DGI answer to a request of 15 May 2024, on the basis of Art. 133-I-C-5° of the CGI; compulsory registration of assignments of receivables: Art. 127-I-A-8°). The optional 1% rate covers the remission granted to the debtor itself.

Key takeaways:

• Under Circular Note 717 (volume 1, p. 113), debt remission is an exceptional gain for the debtor, allocated to the financial year in which it became certain.
• Under Circular Note 717 (volume 1, p. 169 and 187), a debt waiver is a non-deductible liberality for the creditor within the meaning of Article 11-IV of the CGI 2026.
• With a return to better fortune clause, later repayment is deductible for the debtor and non-taxable for the creditor (Circular Note 717, volume 1, p. 114 and 169).
• Losses on receivables that are definitively irrecoverable and duly justified remain deductible (Circular Note 717, volume 1, p. 144, 166 and 168).

Cases decided by the DGI

Answer no. 219 of 05/03/2004: waiver of late-payment interest

The question. A company had provisioned late-payment interest of 577.5 million DH, taken into account in valuing its land inventory, then obtained a waiver of that interest from the State.

The answer. In an answer dated 05/03/2004 (collection of corporate tax questions 2000-2005, p. 28), the DGI specified that the waived interest must be allocated to the results of the financial year in which it was acquired, as non-current income. The land inventory continues to be valued under the statutory rules.

Scope. Individual answer, indicative scope, issued under Law no. 24-86 on corporate tax. The public status of the creditor does not change the classification.

Transposition to 2026. The reasoning transposes under Article 9-I-C-4° of the CGI 2026 (other non-current income) and, for inventories, under Article 8-I. The answer illustrates the rule; it is not general doctrine.

Circular Note of 3 February 2017: receivables of credit institutions

The rule. The DGI Circular Note of 3 February 2017 on certain tax aspects relating to credit institutions provides that a receivable may be definitively cancelled only after legal proceedings have been exhausted and the decisions rendered have been enforced, except in the case of an amicable arrangement or arbitral award. For non-performing receivables of minor importance, whose amount does not exceed 2,500 DH, it allows credit institutions, by way of derogation, to deduct allocations to provisions each financial year within the limit of 1% of the overall amount of gross provisions for the year in respect of non-performing receivables.

Settlement waivers. The same note accepts the deduction of losses resulting from an amicable arrangement involving a waiver of principal, interest or fees, subject to three conditions: credit granted on normal terms; credit not granted to relatives, in-laws or associates of the bank’s managers or senior executives (branch managers included); waiver justified by the debtor’s financial difficulties. The amounts waived must appear on the return provided for in Article 151 of the CGI, attached to the annual return of taxable profit.

Scope. Doctrine specific to credit institutions. Outside credit institutions, or outside the conditions of the note, the waiver falls under the liberality classification used by the administration.

Key takeaways:

• In answer no. 219 of 05/03/2004, the DGI specified that a waiver of late-payment interest by the State is non-current income; in 2026, the basis is Article 9-I-C-4° of the CGI.
• The DGI Circular Note of 3 February 2017 allows credit institutions, by way of derogation, to deduct provisions on non-performing receivables not exceeding 2,500 DH, within the limit of 1% of the overall amount of gross provisions for the year in respect of non-performing receivables.
• At a credit institution, losses arising from an amicable arrangement involving a waiver are deductible under the three conditions set by the same note; this doctrine is reserved for credit institutions.

Application in 2026: worked example of an 800,000 DH intra-group waiver

Assumptions (invented for the example). M, the parent, and F, its subsidiary, are two Moroccan public limited companies (SA) subject to corporate tax. Their financial years open on 01/01/2026. Their net profit is below 100,000,000 DH: 20% rate (Art. 19-I-A and 247-XXXVII-A). Neither is within the first 36 months of operation exempt from the minimum contribution (Art. 144-I-C-1°); 0.25% rate (Art. 144-I-D). On 15/12/2026, M waives, without consideration, a current-account receivable of 800,000 DH owed by F, with no return to better fortune clause. The waiver becomes certain in 2026.

• M: turnover 40,000,000 DH; accounting profit 5,000,000 DH, after booking the 800,000 DH expense.
• F: turnover 10,000,000 DH; taxable result before the waiver − 500,000 DH; no prior losses.

For M, the creditor

An expense does not enter the minimum contribution base (Art. 144-I-B).

For F, the debtor

Including the 800,000 DH in the minimum contribution base follows the administration’s reading (Circular Note 717, volume 3, p. 3). The waiver absorbs the year’s loss and creates 300,000 DH of taxable base.

Group summary

Nothing neutralises this asymmetry: the CGI 2026 has no tax consolidation regime for groups.

Variant with return to better fortune. If F repays in 2029, the repayment is a deductible non-current expense for F (Circular Note 717, volume 1, p. 114) and non-taxable non-current income for M (p. 169).

Key takeaways:

• An 800,000 DH intra-group waiver in 2026 costs the creditor 160,000 DH of corporate tax at 20%, because it is not deductible (Art. 11-IV of the CGI 2026).
• In a subsidiary with a 500,000 DH loss, the same waiver creates 300,000 DH of base, i.e. 60,000 DH of corporate tax in 2026 instead of a 25,000 DH minimum contribution.
• The group’s additional tax cost reaches 195,000 DH, plus 500,000 DH of lost tax loss carry-forward, with no tax consolidation regime to neutralise it.

Points to watch

1. Classify the transaction. Voluntary waiver (liberality, Art. 11-IV), justified loss on an irrecoverable receivable (deductible, Circular Note 717 p. 144, 166 and 168) and provision for doubtful receivables (legal action within 12 months, Art. 10-I-F-2°) are three separate regimes.
2. Attribute the rule to its source. Non-deductibility for the creditor and inclusion of the waived debt in the debtor’s minimum contribution base rest on the reading of Circular Note 717, not on an express provision of the CGI 2026.
3. Cross-border intra-group waivers. A waiver, or a renunciation of interest, in favour of a foreign related company is exposed to Article 213-II and, where applicable, Article 213-V. See our article on transfer pricing in Morocco.
4. Timing. The financial year in which the waiver became certain (Circular Note 717, volume 1, p. 113), not that of an internal decision that is still conditional.
5. VAT. The chargeable event is the total or partial collection of the price (Art. 95). For the DGI, however, “the waiver of commercial receivables is regarded as the remuneration for a service rendered to the party granting it or as a price supplement for taxable transactions carried out by the beneficiary”; it is subject to VAT under the ordinary rules and, for a taxable person under the collection basis, the chargeable event occurs when the waiver is recorded in the accounts (answer no. 561 of 6 June 2013, given on the waiver, by a shareholder, of commercial receivables held against its company; it does not expressly identify the taxable person). For a receivable that has become definitively irrecoverable without a waiver, the DGI lays down the principle that it is not subject to VAT, once all the steps provided for by the texts have been exhausted, if its truly irrecoverable nature is established (letter of 30 April 2025, ref. D506/25/DGI). Under the accrual option, no text reviewed provides for the refund of VAT paid on a waived receivable.
6. Older sources. The rules of the DGI Circular Note of 3 February 2017 (receivables of minor importance, amicable arrangements) apply to credit institutions only; answer no. 219 falls under Article 9-I-C-4° in 2026; the corporate tax rates in Circular Note 717 are outdated (20%, 35% and 40% in 2026, Art. 19-I).
7. Registration duties. The 1% rate (Art. 133-I-D-7°) applies only if the waiver deed is presented for registration (Art. 127-II). For the DGI, a current-account waiver granted to the purchaser of the shares is an assignment of receivable compulsorily registered at 1.50% (Art. 133-I-C-5°).
8. What the texts do not resolve. No administrative position reviewed addresses a waiver granted in insolvency proceedings or in a settlement outside banking, a current-account waiver by an individual shareholder, or a VAT refund on a waived receivable.

Key takeaways:

• In 2026, a loss on a receivable that is definitively irrecoverable and justified is deductible (Circular Note 717, p. 168); for the administration, a voluntary waiver is a liberality added back (Art. 11-IV of the CGI), except, for credit institutions, the amicable arrangement accepted by the DGI Circular Note of 3 February 2017.
• A waiver in favour of a foreign related company falls under Article 213-II of the CGI 2026 (Finance Law no. 40-08, 2009) and, where applicable, the abuse-of-law rule in Article 213-V.
• No provision of the CGI 2026 (Art. 104 and 107 to 114) provides for a refund of VAT on a waived or irrecoverable receivable.

Frequently asked questions

Is a debt waiver deductible for the creditor?

In principle, no: the tax administration classifies it as a non-deductible liberality (Art. 11-IV; Circular Note 717 p. 113, 169, 187). Losses on receivables that are definitively irrecoverable and justified are deductible, as are, for credit institutions, losses arising from an amicable arrangement under the conditions of the DGI Circular Note of 3 February 2017.

Is the debtor taxed on the waived debt?

Yes: non-current income (Art. 9-I-C-4°) allocated to the financial year in which the waiver became certain (Circular Note 717 p. 113); it is offset against a loss of that year.

Is the waiver received included in the minimum contribution base?

Under the administration’s reading of Art. 144-I-B (Circular Note 717 vol. 3: other non-current income under 9-I-C-4° as gifts received), yes; rate 0.25%.

What does a return to better fortune clause change?

Nothing at the outset (taxable for the debtor, non-deductible for the creditor); on repayment: deductible expense for the debtor, non-taxable income for the creditor (Circular Note 717 p. 114 and 169).

Can a bank provision its small non-performing receivables without legal action?

Yes, by way of derogation: the DGI Circular Note of 3 February 2017 allows credit institutions to deduct allocations to provisions for non-performing receivables of minor importance (2,500 DH at most), within the limit of 1% of the overall amount of gross provisions for the year in respect of non-performing receivables; the definitive cancellation of a receivable requires the exhaustion of legal proceedings and the enforcement of the decisions rendered, except in the case of an amicable arrangement or arbitral award. Reserved for credit institutions.

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