In brief: Moroccans residing abroad (MRE) are considered non-resident taxpayers in Morocco and are only taxable on their Moroccan-source income (Art. 23 GTC): rental income, dividends, interest, property gains and securities capital gains. They benefit from the exemption of the gain on the sale of the home kept in Morocco as their primary residence. Retirees who transfer their tax domicile to Morocco, for their part, benefit on their foreign-source pension from the 70%/40% allowance and an 80% reduction of the tax on amounts transferred definitively in non-convertible dirhams (Art. 60 and 76). Tax treaties concluded by Morocco eliminate double taxation, through a tax credit or an exemption depending on the category of income.
Tax Domicile and MRE Status (Art. 23 GTC)
Article 23 of the General Tax Code defines the criteria for tax domicile in Morocco. Any person who meets any of the following conditions is considered a Moroccan tax resident:
- Has a permanent home in Morocco
- Has the center of their economic interests in Morocco
- Stays in Morocco continuously or intermittently for a period exceeding 183 days in any 365-day period
An MRE who does not meet any of these conditions is classified as a non-resident taxpayer. As such, they are only taxable in Morocco on their Moroccan-source income, meaning income generated by or connected to assets, activities or investments located in Morocco.
Territoriality Principle for Non-Residents
The principle is clear: a non-resident MRE does not declare their professional or salary income earned abroad in Morocco. Only income having its source within Moroccan territory falls within the scope of Moroccan income tax.
Taxable Moroccan-Source Income
The main categories of Moroccan-source income that may concern MREs are the following:
Property Income (Rental Income)
Property income derived from the rental of real estate located in Morocco is subject to income tax under the progressive scale, after a flat-rate allowance of 40% on the gross rental amount (Art. 64-II GTC), whether the owner is resident or not. Where the tenant is a legal entity or a professional taxed under the actual or simplified net income regime, the tenant applies a withholding tax on the gross rent (Art. 160 bis):
| Annual Gross Rental Amount | Withholding Rate |
|---|---|
| Below 120,000 MAD | 10% (Art. 73-II-B-5°) |
| Equal to or above 120,000 MAD | 15% (Art. 73-II-C-4°) |
This withholding is not final: it is creditable against the income tax computed under the progressive scale, and any excess is subject to automatic refund (Art. 241 bis). The only final regime is the optional 20% levy (Art. 64-IV and 73-II-F-12°), reserved for rents subject to the withholding tax; it exempts the MRE from filing a return for this income (Art. 86-6°). Below 40,000 MAD of annual gross rent, the tenant is exempt from applying the withholding, but the income remains taxable.
Dividends from Moroccan Companies
Dividends distributed by Moroccan companies to non-resident MREs are subject to an 11.25% withholding tax in 2026 (10% from 2027), the standard rate. A bilateral tax treaty may cap this rate: the treaty rate applies only if it is lower than the domestic rate of 11.25%; where it is higher (for example 15%), the domestic rate is applied.
The distributing company withholds the tax and remits it to the Treasury. The MRE receives a dividend net of withholding tax.
Interest on Investments in Morocco
Interest on term deposits, bonds and other fixed-income investments is subject to a withholding tax of 30% final (non-professional individuals) or 20% creditable (legal entities and professional individuals). For interest paid to non-residents, the withholding falls under gross income at a rate of 10% (Art. 15 GTC), subject to tax treaties which may reduce this rate.
Interest on savings passbook accounts held with Moroccan banks remains subject to the specific rate provided by the GTC.
Property Gains (Real Estate Capital Gains)
The property gain realized upon the sale of real estate located in Morocco is subject to income tax, whether the seller is a resident or not. The applicable rate is 20% on the net gain, with a minimum of 3% of the sale price.
Securities Capital Gains
Capital gains on the sale of securities of Moroccan companies are taxable under domestic law at 15% for shares listed on the stock exchange and 20% for unlisted shares and partnership interests (Art. 73-II-C-1° and F-2°). An exemption threshold of 30,000 MAD in annual sales applies (Art. 68-II). Tax treaties may, however, reserve taxation to the state of residence: this is the case of the Morocco-France treaty, whose article 24 makes these gains taxable exclusively in the state where the seller is domiciled.
Specific Exemptions for MREs
Primary Residence Exemption (Art. 63 GTC)
MREs benefit from the exemption of the property gain realized upon the sale of their primary residence in Morocco, under the same conditions as residents:
- The property must have been used as a primary residence for at least 5 years on the date of sale (a maximum period of one year after the home is vacated is allowed to complete the sale)
- The exemption can only be obtained once during these 5 years
- If the sale price exceeds 4,000,000 MAD, the gain remains exempt, but a minimum tax of 3% is due on the portion of the sale price above 4,000,000 MAD (Art. 144-II-2°)
For an MRE, the following is treated as a primary residence, as long as it has not been rented out or used for business purposes: the home they keep as their residence in Morocco, or the one occupied free of charge by their spouse, ascendants or descendants in the direct line of the first degree (Art. 63-II-B).
Reduction for Foreign Retirement Pensions (Art. 76 GTC)
As long as they remain tax resident abroad, a retired MRE is not taxable in Morocco on their foreign-source pension, which is not Moroccan-source income (Art. 23-I-2°). Once they transfer their tax domicile to Morocco, this pension becomes taxable and first benefits from the pension allowance: 70% on the gross taxable amount not exceeding 168,000 MAD per year and 40% on the excess (Art. 60 GTC).
In addition to this allowance, they receive an 80% reduction of the tax due on the pension and corresponding to amounts transferred definitively in non-convertible dirhams (Art. 76 GTC). These two combined advantages make the tax burden very low.
Conditions:
- Permanent and irrevocable transfer in dirhams
- Transfer proof (bank conversion slip)
- Annual IR return filed in Morocco
Tax Treaties: Eliminating Double Taxation
Morocco has concluded more than 60 bilateral tax treaties designed to avoid double taxation. For MREs, these treaties are essential as they determine:
- The right to tax of each state on different categories of income
- The reduced withholding tax rates applicable to dividends, interest and royalties
- The mechanism for eliminating double taxation (tax credit or exemption)
Tax Credit Mechanism (Art. 77 GTC)
When Moroccan-source income is taxed in Morocco, it is the applicable tax treaty and the law of the state of residence that determine how the MRE eliminates double taxation in their country of residence (tax credit or exemption depending on the category of income). Article 77 of the GTC governs the reverse situation: it allows a taxpayer domiciled in Morocco to credit against Moroccan income tax the foreign tax paid on their foreign-source income, up to the portion of Moroccan income tax corresponding to that income.
Examples of Reduced Treaty Rates
| Treaty | Dividends | Interest | Royalties |
|---|---|---|---|
| Morocco – France | 15% | 10% | 10% |
| Morocco – Belgium | 15% | 10% | 10% |
| Morocco – Canada | 15% | 15% | 10% |
| Morocco – Netherlands | 10% | 10% | 10% |
| Morocco – Spain | 10% | 10% | 5% – 10% |
These rates apply subject to providing a tax residence certificate from the MRE’s country of residence. A treaty cap only applies if it is lower than the Moroccan domestic rate (11.25% for dividends paid in 2026, 10% for interest and royalties paid to non-residents); where it is higher, the domestic rate applies.
Filing Obligations for MREs
Annual Property Income Return
An MRE receiving property income must file an annual global income return before March 1 of the following year (Art. 82-I), crediting the 10% or 15% withholding taxes suffered. They are exempt from filing only for the portion of rents that has borne the optional 20% final levy (Art. 86-6°).
Property Gain Return
In the event of a real estate sale, the MRE must file a property gain return within 30 days following the date of sale (Art. 83 GTC) and pay the corresponding tax within the same period (Art. 173-I).
Securities Capital Gain Return
For securities registered in an account with an authorised financial intermediary, the tax is withheld at source by the intermediary (Art. 174-II-B). For unregistered securities (SARL shares, for example), the seller pays the tax within 30 days following the date of each sale (Art. 173-I) and summarises all sales of the year in an annual return to be filed before April 1 of the following year (Art. 84-I GTC).
Tax Representative
Non-residents may appoint a tax representative in Morocco to carry out filing formalities on their behalf. This option is particularly recommended for MREs holding significant real estate or financial assets in Morocco.
Frequently Asked Questions (FAQ)
Do I have to declare my foreign income in Morocco?
No. As a non-resident MRE in Morocco, you are only taxable on your Moroccan-source income. Your salary, professional or investment income earned abroad is not declarable in Morocco. Only your country of tax residence can tax that income.
I own an apartment in Morocco that I use during vacations. Do I have to pay IR?
If the apartment is not rented and is solely for your personal use, it does not generate taxable property income for IR purposes. However, you remain liable for the housing tax and the communal services tax. If you rent it out, the rent becomes property income subject to income tax in Morocco.
How do I benefit from reduced tax treaty rates?
You must provide the paying company or institution with a tax residence certificate issued by the tax authority of your country of residence. This certificate must be presented before the income payment for the reduced treaty rate to be applied directly.
Can I recover an IR overpayment in Morocco?
Yes. If withholding tax was applied at the standard rate when a reduced treaty rate applies, you can request a refund from the DGI by producing the tax residence certificate and proof of the withholding suffered.
READ ALSO:
- Property Income and IR in Morocco
- Withholding Tax on Dividends in Morocco
- Property Gain on Real Estate Sale in Morocco
- Securities Income in Morocco
- Morocco’s Tax Treaties
- Tax Law Advisory — Upsilon Consulting
This article is written by the team of chartered accountants at Upsilon Consulting, a firm registered with the Order of Chartered Accountants (OEC) of Morocco.
