In brief: The 2023 Finance Bill (PLF 2023) launched a major overhaul of Corporate Tax rates in Morocco. The reform introduces a progressive convergence toward a unified 20% rate by 2026 for most companies, with higher rates for large enterprises (35%) and financial institutions (40%).
The 2023 Finance Bill in Morocco (PLF 2023) introduced a set of reforms to the tax system as defined by the General Tax Code (CGI). Indeed, the enactment of certain provisions is likely to completely transform the taxation system as it has been known for a long time.
Upsilon Consulting summarizes the main tax measures of the 2023 Finance Bill regarding Corporate Tax rates.
Objective of the Corporate Tax Rate Overhaul in the 2023 Finance Bill in Morocco
According to the document presenting the measures, the overhaul of Corporate Tax rates has the following objectives:
- First, the elimination of the variability of the standard proportional rate based on the taxable income achieved and its replacement with a unified standard common law rate;
- Second, the elimination of preferential regimes applied to industrial acceleration zones and CFC;
- Third, the elimination of the gap between rates applied to local revenue and exports;
- Fourth, the improvement of the contribution of large companies achieving a net profit exceeding 100 million dirhams;
- Finally, the improvement of the tax contribution of credit institutions and similar organizations.
Overhaul of Corporate Tax Rates - Common Law Regime
The 2023 Finance Bill proposes a progressive overhaul of Corporate Tax rates. Indeed, the stated objective of this bill is the progressive convergence towards a unified common law rate of 20%.
Currently, the common law rate corresponds to a progressive schedule that varies between 10% and 31%.
Read for more details: Corporate Tax in Morocco
The new rates proposed by the 2023 Finance Bill are as follows:
| **Net Income Level** | **Currently Applicable Rate** | **2023 Finance Bill 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% | 20% | 20% | 20% |
| From 1,000,000 to 99,999,999 | 31% | 28.25% | 25.5% | 22.75% | 20% |
| Greater than or equal to 100,000,000 | 31% | 32% | 33% | 34% | 35% |
Specific Regimes
Furthermore, the bill proposes to revise the current Corporate Tax rates of companies whose rate is capped towards unified rates. These include, in particular:
- First, companies exporting products and services;
- Second, hotel companies and tourist entertainment establishments;
- Third, exporting mining companies;
- Fourth, craft companies;
- Fifth, private educational or vocational training establishments;
- Sixth, sports companies;
- Seventh, real estate developers (legal entities) for income from the rental of university cities, residences, and campuses;
- Eighth, taxable agricultural operations;
- Finally, companies carrying out service outsourcing activities.
The new rates proposed by the 2023 Finance Bill are as follows:
| **Net Income Level** | **Currently Applicable Rate** | **2023 Finance Bill 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% | 20% | 20% | 20% |
| From 1,000,000 to 99,999,999 | 20% | 20% | 20% | 20% | 20% |
| Greater than or equal to 100,000,000 | 20% | 23.75% | 27.5% | 31.25% | 35% |
Overhaul of Rates for Companies in Industrial Acceleration Zones and CFC
The bill maintains the five-year exemption for these companies. However, these companies benefited from a specific rate set at 15% after the exemption period:
- First, for companies operating in industrial acceleration zones, beyond the five (5) year exemption period,
- Second, for service companies with Casablanca Finance City status, in accordance with the legislation and regulations in force, beyond the five (5) year exemption period.
The 2023 Finance Bill proposes to revise the current Corporate Tax rates as follows:
| **Net Income Level** | **Currently Applicable Rate** | **2023 Finance Bill 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% |
| Greater than or equal to 100,000,000 | 15% | 16.25% | 17.5% | 18.75% | 20% |
Overhaul of Rates for Industrial Companies
In 2022, industrial companies benefited from a rate of 26% (when the income was less than 100 million dirhams).
The 2023 Finance Bill proposes to revise the Corporate Tax schedule as follows:
| **Net Income Level** | **Currently Applicable Rate** | **2023 Finance Bill 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% |
| Greater than or equal to 100,000,000 | 31% | 32% | 33% | 34% | 35% |
2023 Finance Bill - Review of Tax Rates for Credit and Insurance Companies
In 2022, the Corporate Tax rate was 37% for:
- First, credit institutions and similar organizations,
- Second, Bank Al Maghrib,
- Third, the Caisse de Depot et de Gestion, and
- Fourth, insurance and reinsurance companies.
The 2023 Finance Bill proposes to progressively increase the Corporate Tax rate applicable to these institutions to reach 40%.
The new tax rates for these companies are as follows:
| **Net Income Level** | **Currently Applicable Rate** | **2023 Finance Bill Proposal** | |||
| **2022** | **2023** | **2024** | **2025** | **2026** | |
| Applicable Rate | 37% | 37.75% | 38.50% | 39.25% | 40% |
Provisional Installments
On a transitional basis, the provisional installments due for each fiscal year beginning during the period from January 1, 2023, to December 31, 2026, are calculated according to the Corporate Tax rates applicable to that fiscal year.
Frequently Asked Questions
What are the main Corporate Tax rate changes in the 2023 Finance Bill in Morocco?
The 2023 Finance Bill introduced a proportional reform of Corporate Tax rates in Morocco, moving toward a unified rate structure. The reform establishes different rates based on net profit brackets, with the goal of simplifying the tax system while ensuring large companies contribute fairly to public finances.
How does the 2023 Finance Bill affect small businesses in Morocco?
Small businesses with lower net profits benefit from reduced Corporate Tax rates under the 2023 reform. The proportional rate structure ensures that SMEs pay a lower tax burden, which encourages entrepreneurship and supports the growth of the Moroccan economic fabric.
When do the new Corporate Tax rates from the 2023 Finance Bill take effect?
The new rates are being implemented progressively over a transitional period from January 1, 2023, to December 31, 2026. During this period, provisional installments are calculated according to the rates applicable to each specific fiscal year, allowing businesses time to adjust their tax planning.
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