The Finance Law for the fiscal year 2025 is the penultimate step of the structural tax reform initiated in 2023, in line with Framework Law No. 69-19. The measures introduced are detailed in the Circular Note No. 736 issued by the Directorate General of Taxes (DGI).
The FL 2025 does not modify corporate tax (IS) rates, which continue their convergence trajectory toward the 2026 target rates. However, it introduces a major revision of the income tax (IR) brackets, a higher depreciation ceiling for passenger vehicles, group restructuring measures and provisions related to the 2030 FIFA World Cup.
I – Revision of the Income Tax (IR) Brackets
The most impactful measure of the FL 2025 is the revision of the progressive IR scale, applicable to income earned from January 1, 2025. The new brackets significantly reduce the tax burden on average salaries.
| Annual income bracket (MAD) | Rate | Amount to deduct |
|---|---|---|
| 0 to 40,000 | 0% | — |
| 40,001 to 60,000 | 10% | 4,000 |
| 60,001 to 80,000 | 20% | 10,000 |
| 80,001 to 100,000 | 30% | 18,000 |
| 100,001 to 180,000 | 34% | 22,000 |
| Above 180,000 | 37% | 27,400 |
Practical impact: an employee earning up to MAD 6,000/month in gross taxable income is now exempt from IR, compared to MAD 4,500/month under the former brackets. Use our salary simulator to calculate the impact on your payslip.
II – Corporate Tax Trajectory (No Rate Changes)
The FL 2025 does not modify IS rates. The transitional rates under the 2023 reform continue according to the established schedule, converging toward the target rates of the FL 2026:
- 20% for net profit ≤ MAD 100 million
- 35% for net profit > MAD 100 million
- 40% for credit institutions and similar organizations
The Social Solidarity Contribution (CSS) remains in force for 2025, as extended by the FL 2023 for the 2023-2025 period.
Reference: Circular Note No. 736 — FL 2025
III – Withholding Tax on Dividends: Declining Trajectory
The FL 2025 continues the declining trajectory of the withholding tax on dividends, initiated since 2023:
| Year | WHT rate on dividends |
|---|---|
| 2023 | 13.75% |
| 2024 | 12.50% |
| 2025 | 12.50% |
| 2026 | 11.25% |
| 2027+ | 10% (target rate) |
Since the FL 2025, a single schedule applies to all dividends paid, regardless of the fiscal year in which profits were generated. This withholding is final for resident individuals. For legal entities, it is credited against corporate tax due, with the possibility of refund.
Holding companies and corporate groups should adjust their distribution policies accordingly.
IV – Higher Depreciation Ceiling for Passenger Vehicles
The FL 2025 raises the deductibility threshold for depreciation charges on passenger vehicles from MAD 300,000 to 400,000 including tax per vehicle, spread over 5 years in equal installments (i.e., MAD 80,000/year maximum, up from MAD 60,000).
This increase directly impacts the taxable income of companies with a significant vehicle fleet. The excess portion of depreciation that had to be added back to taxable income is reduced accordingly.
Reference: Circular Note No. 736 — Art. 10 (I-F-1°-b) of the GTC, as amended by Article 8 of the FL 2025.
V – Group Restructuring Tax Regime
The FL 2025 introduces amendments to the tax neutrality regime applicable to intra-group restructuring operations:
- Mergers: maintaining tax neutrality subject to retention of contributed assets
- Demergers: clarification of eligibility conditions for the preferential regime
- Partial asset transfers: clarifications on the treatment of unrealized capital gains
These measures facilitate internal reorganizations of corporate groups without tax friction, encouraging the rationalization of structures.
VI – Exemption of Basic Retirement Pensions
The FL 2025 introduces the IR exemption on retirement pensions and annuities paid under basic retirement schemes, effective from January 1, 2026. This measure was extended by the FL 2026 to include CIMR supplementary pensions.
VII – Clarification of the Tax Regime for Joint Ventures
The FL 2025 provides clarifications on the tax regime applicable to joint venture companies (sociétés en participation), particularly regarding:
- The allocation of taxation between partners
- Specific filing obligations
- The interaction with the tax transparency regime
VIII – Special Tax on Cement
The FL 2025 introduces (or modifies) a special tax applicable to the cement sector. This measure is part of the policy to mobilize tax revenues on construction materials.
IX – FIFA 2030 Tax Provisions
In preparation for the 2030 FIFA World Cup in Morocco (co-hosted with Spain and Portugal), the FL 2025 provides specific tax measures to support investments related to this major event.
Official source: Circular Note No. 736 — Tax Measures of the Finance Law 2025 (Directorate General of Taxes).
To assess the impact of the FL 2025 on your situation, contact Upsilon Consulting. Our team of chartered accountants is available to assist you with your tax strategy.
What is your new corporate tax rate? Use our free IS calculator to instantly check the rate applicable to your company.
Frequently Asked Questions
What are the main tax measures of the Finance Law 2025 in Morocco?
The FL 2025 introduces a new IR scale (exemption raised to MAD 40,000/year, maximum rate lowered to 37%), the increase of the vehicle depreciation ceiling from MAD 300,000 to 400,000 including tax, the continued reduction in the withholding tax on dividends (12.50% in 2025), amendments to the group restructuring regime, exemption of basic retirement pensions and provisions related to FIFA 2030.
How does the new 2025 IR scale affect my net salary?
The exemption threshold rises from MAD 30,000 to MAD 40,000 per year (from MAD 2,500 to MAD 3,333/month). An employee earning MAD 6,000/month in gross taxable income is now fully exempt from IR. For higher salaries, the reduction is proportional thanks to the widening of intermediate brackets. Test with our simulator.
Does the FL 2025 change corporate tax rates?
No. Corporate tax rates remain unchanged in 2025. The transitional rates from the 2023 reform continue to apply, with final convergence to 20%/35% scheduled under the FL 2026. The main IS measures of the FL 2025 concern vehicle depreciation and group restructuring.
What is the withholding tax rate on dividends in 2025?
The withholding tax rate on dividends is 12.50% in 2025. Since the FL 2025, a single schedule applies to all dividends, regardless of the year the profits were earned. The trajectory foresees 11.25% in 2026 and 10% from 2027 onward.
When does the retirement pension exemption take effect?
The IR exemption on basic retirement pensions, introduced by the FL 2025, takes effect on January 1, 2026. The FL 2026 extended this exemption to CIMR supplementary pensions.
