In the Moroccan context, understanding and adequately managing operating allowances is fundamental to optimizing the tax burden and ensuring compliance with current regulations. This involves not only in-depth knowledge of current tax laws but also constant monitoring of legislative developments likely to affect the way in which these allowances are processed and declared.
In this overview, we will explore the key principles of operating endowment taxation in Morocco, with a focus on best practices for efficient and compliant tax management.
Circular 717 provides for the following method in terms of calculating provisions: “In general, the calculation of a provision is done in two stages:
1. Estimation of the probable amount of the charge or risk: this involves estimating the probable amount of the charge or risk for which the company constitutes the provision. This estimate must take into account prudence and objectivity, and consider all relevant elements.
2. Accounting for the provision: once the probable amount of the charge or risk is estimated, the corresponding provision should be recognized in the company’s accounts.
The provision must be clearly specified as to its nature and an approximate estimate as to its amount.
It is important to note that the provisions must be recognized in accordance with the Moroccan accounting standards in force and that they must meet the conditions of tax deductibility mentioned in circular 717, page 157.
FAQ “Deductible operating grants in Morocco”
Q1: What are operating grants in Morocco?
A1: Operating allowances in Morocco include depreciation allocations and provision allocations, according to article 10-IF of the Moroccan CGI. They represent the loss in value of fixed assets and the sums set aside to cover potential losses or charges.
Q2: What are the conditions for the deductibility of Operating allowances?
A2: Grants must be made in the interest of the operation, justified and documented. Depreciation requires the use of the asset in the professional activity, an effective loss of value, and accounting in accordance with Moroccan accounting standards. Provisions must correspond to a possible or probable risk, be linked to real events, and be recorded according to Moroccan accounting standards.
Q3: How are Operating allowances calculated?
A3: The calculation depends on the method of depreciation or amortization chosen, such as the linear, declining balance or units of work method for depreciation. For provisions, it is necessary to estimate the probable amount of the charge or risk, then record the provision in the company’s accounts.
Read original article in French : Dotations d’exploitation déductibles au Maroc