In brief: Hotels in Morocco benefit from a total Corporate Tax exemption for five years on revenue earned in foreign currency, plus a reduced VAT rate of 10% on accommodation and catering. Regional taxes (tourist tax, tourism promotion tax) also apply per night and per person.
This article covers hotel taxation in Morocco. The provisions are up to date with the 2024 Finance Law.
Hotel companies and tourist establishments in Morocco benefit from advantageous taxation. Indeed, these establishments enjoy two advantages:
- Reduced VAT rate: accommodation and catering operations benefit from a 10% VAT rate
- Corporate Tax exemption: total exemption for five years on the portion of revenue earned in foreign currency
Hotel and Tourist Establishment Taxation: Corporate Tax
Hotels and hotel establishments benefit from advantageous Corporate Tax treatment. However, the advantages only apply to the portion of the tax base corresponding to revenue earned in foreign currency.
Hotels and similar hotel establishments benefit, under the provisions of article 6-I-B-3 of the General Tax Code, from a total exemption from Corporate Tax for a period of 5 years.
Indeed, the tax base benefiting from this exemption corresponds to:
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Revenue earned in foreign currency;
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Duly repatriated:
Either directly (for example by bank transfer or credit card)
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Or through travel agencies.
Which establishments qualify for this tax advantage?
To benefit from this advantage, the establishment must be among those targeted by Law 61-00.
This law considers as a tourist establishment: “any commercial establishment that receives transient customers and provides them with:
- Accommodation services
- Catering
- Beverage and entertainment services
It is important to note that, in its article 3, this law requires these establishments to be classified according to specific criteria.
Furthermore, article 2 of this law defines the list of hotel establishments. Thus, in this law we can find the following classification:
- Hotels
- Motels
- Hotel residences
- Tourist promotion residential properties
- Hotel-clubs
- Inns
- Guesthouses
- Boarding houses
- Camping, caravanning
- Relay stations
- Lodges
Thus, from the perspective of hotel taxation, all establishments meeting the criteria of this text are eligible for the aforementioned tax advantages.
What constitutes foreign currency revenue under article 6 of the General Tax Code?
The law conditions the exemption mentioned above on:
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On one hand, earning revenue in foreign currency,
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On the other hand, repatriating these currencies.
Either directly by the establishment;
-
Or indirectly through travel agencies.
The revenue eligible for the above advantage therefore concerns the revenue that the hotel collects:
- Directly from a foreign bank account to its local account;
- By international credit card;
- Via traveller’s cheques and foreign cheques;
Moreover, revenue collected in foreign currency by travel agencies on behalf of a hotel also benefits from the exemption. Indeed, despite the fact that the agency pays in dirhams, it is the collection by the agency that prevails.
Hotels must present during a tax audit:
- Form 2 certificates and foreign currency collection certificates that the bank must provide;
- Certificates provided by the CMI (Interbank Monetary Center) for card collections;
- Certificates provided by travel agencies where applicable.
It should be noted, however, that Circular 717 requires for amounts processed through a travel agency:
- On one hand, the issuance of an invoice by the establishment supported by a reservation voucher
- On the other hand, that the invoice bears the mention “non-resident client”
The circular further specifies that the tax administration may revoke the tax advantage if the foreign currencies are not repatriated within the deadlines set by exchange regulations.
Details on the exemption period
The Circular 717 from the DGI specifies that the exemption period covers 60 consecutive months from the first accommodation operation.
Furthermore, a merger or transfer of an establishment does not invalidate the five-year exemption.
Hotel and Tourist Establishment Taxation - VAT
Under the provisions of article 89 of the General Tax Code: “accommodation operations and/or the sale of food or beverages for on-site consumption” are subject to VAT.
This taxation applies to both revenue earned in foreign currency and in dirhams. Indeed, since the services are consumed in Morocco, the taxation remains due to the treasury.
Nevertheless, accommodation and catering operations benefit from the reduced VAT rate of 10%.
The reduced rate of 10% applies to all ancillary revenue. Thus, the following are also taxable at this rate:
- On-site catering
- Telephone services
- Currency exchange commissions
- Laundry fees
- Safe deposit box rental
Nevertheless, the rental of premises to external service providers (shops, currency exchange offices, etc.) remains taxable at the standard rate of 20%.
Hotel Taxation: Regional Taxes
Hotel activity is subject to specific local taxes which we outline below.
Tourist Tax (Taxe de sejour)
This is an ad valorem tax (added to the sales invoice and charged to the customer). Hotel establishments must collect this tax per night and per person.
The tourist tax rates are as follows (article 130 of Law 30-89 on local government taxation):
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On one hand, for guesthouses, conference centers or halls and luxury hotels, it ranges from 15 to 30 MAD (depending on the municipality)
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On the other hand, for hotels, it varies by category (stars)
First category: 5-star from 10 to 25 dirhams;
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Second category: 4-star from 5 to 10 dirhams;
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Third category: 1 and 2-star from 2 to 5 dirhams;
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Fourth category: Private clubs from 10 to 25 dirhams;
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Fifth category: Holiday villages from 5 to 10 dirhams;
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Sixth category: Tourist residences from 3 to 7 dirhams;
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Finally, for all other categories, it must range between 2 and 5 dirhams.
Tourism Promotion Tax
Decree 2-79-749 established in 1979 a tax for the benefit of the Moroccan National Tourism Office, a parafiscal tax called “tourism promotion tax.” This tourism promotion tax is calculated per night and per person as follows:
- First category: Luxury hotels, the tax is 15 dirhams;
- Second category: 5-star hotels and first-category guesthouses, the tax is 11 dirhams;
- Third category: 4-star hotels and second-category guesthouses, the tax is 8 dirhams;
- Fourth category: 3-star hotels, tourist residences and motels: 5 dirhams;
- For 2-star and 1-star hotels, it is set at 4 and 2 MAD.
- Finally, guests of inns, boarding houses, relay stations and lodges must pay 1 dirham
Beverage Sales Tax
The beverage sales tax applies to operators of:
- cafes,
- bars
- tea rooms
- and in general, any establishment selling beverages for on-site consumption.
Furthermore, this tax applies to sales by these establishments of beverages for on-site consumption, whether alcoholic or not.
The rate of this tax is set at a rate varying from 2% to 10% depending on the municipality.
Frequently Asked Questions
What taxes apply to hotels in Morocco?
Hotels in Morocco are subject to several taxes including Corporate Tax on profits, VAT at a reduced rate of 10% on accommodation and restaurant services, tourist tax, city tax, and the beverage sales tax for establishments serving drinks. Professional tax also applies based on the rental value of the property.
What is the VAT rate for hotel services in Morocco?
Hotel accommodation and restaurant services in Morocco are subject to a reduced VAT rate of 10%, rather than the standard 20% rate. This reduced rate was established to support the tourism sector, which is a key pillar of the Moroccan economy. Tour operators and travel agencies benefit from specific VAT regimes as well.
Are there tax incentives for new hotels in Morocco?
New hotels in Morocco can benefit from a temporary exemption from professional tax during the first five years of operation. Additionally, the tourism sector enjoys a reduced VAT rate of 10% on accommodation and restaurant services, rather than the standard 20%, as a measure to support the industry’s development. Investors in the hotel sector may also benefit from specific incentives under investment charters and free zone regimes, depending on the location and scale of the project.
Hotel owner? Know your Corporate Tax rate. Use our interactive Corporate Tax Calculator to find the exact rate for your establishment based on turnover and fiscal year.
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