In brief: A liberal professional in Morocco (doctor, lawyer, architect, chartered accountant) can operate as a sole proprietor (IR, progressive scale up to 37%) or through a company (IS at 20% then IR on distribution). The optimal choice depends on the level of profit: below about MAD 340,000 of net profit, IR is in principle more advantageous; above that, an SARL under IS allows you to manage your remuneration and benefit from limited liability.
Liberal professions and professional income (Art. 30 of the Tax Code)
Liberal professions exercised as a sole proprietor generate professional income within the meaning of Article 30-1°-c of the Tax Code (“a liberal profession or any profession other” than commercial, industrial or artisanal ones) and is subject to income tax. The Moroccan Tax Code has no “non-commercial profits” category.
The following professions are notably concerned:
- Medical professions: doctors, dentists, pharmacists, physiotherapists
- Legal professions: lawyers, notaries, bailiffs, legal advisers
- Technical professions: architects, consulting engineers, surveyors, topographers
- Financial professions: chartered accountants, statutory auditors, management consultants
- Others: consultants, independent trainers, designers
The liberal professional has the choice between two fundamentally different legal frameworks to carry out their activity, each with distinct tax consequences.
Option 1: Sole proprietorship — IR
Tax regime
The professional operating as a sole proprietor is subject to IR under the progressive scale (Art. 73 of the Tax Code). The marginal tax rate (MTR) reaches 37% for the net taxable income bracket exceeding MAD 180,000 per year.
The net professional income is determined under the net real profit (RNR) regime or, for taxpayers whose turnover does not exceed certain thresholds, the simplified net profit (RNS).
For a detailed treatment of professional income tax, see our dedicated guide.
Deductible expenses under IR
The liberal professional may deduct from their receipts all expenses incurred for business purposes:
- Rent for the office or professional premises
- Depreciation of equipment and professional assets
- Personnel costs (secretary, assistant, associates)
- Social contributions (CNSS, health insurance)
- Fees paid to third parties (subcontracting, expertise)
- Vehicle expenses (professional proportion)
- Professional insurance
Advantages of individual IR
- Administrative simplicity: no company formation formalities
- Reduced management costs: lighter accounting obligations than a company
- Full freedom to manage cash flows
- Exemption from the minimum contribution for the first three financial years following the start of the professional activity (Art. 144-I-C-2° — a rule specific to income tax; the 36-month rule applies to companies subject to corporate tax). After this period, the minimum contribution of the liberal professions referred to in Articles 89-I-12° and 91-VI-1° (lawyers, notaries, architects, engineers, advisers, experts, certified accountants, doctors, dentists, etc.) is calculated at 4% of turnover and income, compared with 0.25% under the general rule, with a floor of MAD 1,500 (MAD 3,000 under corporate tax); the portion of the minimum contribution that exceeds the income tax attributable to professional income remains definitively due to the Treasury (Art. 144-I-D and E).
Disadvantages of individual IR
- High marginal rate: 37% from MAD 180,001 of net taxable income
- Unlimited liability: personal assets are at risk
- No distinction between remuneration and profit
- Limited optimisation: inability to modulate the pace of distributions
Option 2: Setting up a company — IS
Legal structure
The professional may operate through an SARL, SARLAU (single-member) or SAS. The company is then subject to corporate tax (IS).
Applicable IS rates (2026)
Since the completion of the reform introduced by the 2023 Finance Act, IS is proportional (no longer progressive):
| Net taxable profit (MAD) | IS rate |
|---|---|
| General case | 20% |
| Net profit ≥ 100,000,000 | 35% (on the entire profit) |
| Credit institutions, insurers | 40% |
For a liberal-profession company, the single 20% rate applies.
Double taxation: IS + IR on distribution
The net profit after IS may be distributed as dividends, subject to a 11.25% withholding tax in 2026 (single rate per year of payment; 10% from 2027) (Art. 19-IV-B and 247-XXXVII-C). The professional therefore bears double taxation:
- IS on the company’s profit
- IR (11.25% withholding) on the dividends received
The professional may also pay themselves a manager’s salary, which is deductible from the company’s result and subject to salary income tax under the progressive scale.
Advantages of IS
- Moderate IS rate: 20% on the company’s profit
- Remuneration management: choice between manager’s salary and dividends
- Limited liability: personal assets are protected (SARL/SAS)
- Greater latitude in terms of deductible expenses
- Enhanced professional image with clients and partners
Disadvantages of IS
- Formation and management costs (articles of association, publication, accounting, possible statutory audit)
- Heavier accounting obligations (balance sheet, tax returns, IS and VAT filings)
- Double taxation on distributed profits
Numerical comparison: effective rate by profit level
The table below compares the overall effective tax rate for a single liberal professional with no dependants, depending on whether they operate under IR or IS (with full distribution of the post-IS profit as dividends).
| Net profit (MAD) | Individual IR | IS 20% + 11.25% dividends | Difference |
|---|---|---|---|
| 100,000 | 12,000 (12%) | 20,000 (IS) + 9,000 (div.) = 29,000 (29%) | IR more advantageous |
| 300,000 | 83,600 (27.9%) | 60,000 (IS) + 27,000 (div.) = 87,000 (29%) | IR more advantageous |
| 500,000 | 157,600 (31.5%) | 100,000 (IS) + 45,000 (div.) = 145,000 (29%) | IS more advantageous |
| 1,000,000 | 342,600 (34.3%) | 200,000 (IS) + 90,000 (div.) = 290,000 (29%) | IS more advantageous |
Assumptions: IR calculated under the 2026 progressive scale without additional deductions. IS at the proportional 20% rate. Dividends = net profit after IS, 11.25% withholding (2026).
Tipping point: with a proportional 20% IS, the overall IS + dividends burden comes out at a near-constant effective rate of about 29%. As long as the profit is fully distributed, individual IR remains more advantageous up to around MAD 340,000 of net profit (break-even 0.37 × P − 27,400 = 0.29 × P, i.e. P ≈ MAD 342,500); beyond that, the company under IS becomes more attractive from a purely tax perspective. The real benefit of the corporate structure, however, lies in remuneration management (deductible manager’s salary) rather than in dividend distribution alone.
Optimisation through the manager’s salary
In practice, the professional in an SARL can combine manager’s salary and dividends to optimise their overall tax burden. The manager’s salary is:
- Deductible from the company’s result (reducing the IS base)
- Subject to salary IR (with a 35% professional expenses deduction for gross taxable income ≤ MAD 78,000, 25% above, capped at MAD 35,000/year, and social contributions deduction)
This combination allows taking advantage of the 0% bracket and the lower brackets of the salary IR scale, while limiting IS and the withholding tax on dividends.
Asset protection: a decisive criterion
Sole proprietorship: unlimited liability
A liberal professional operating as a sole proprietor commits the entirety of their personal assets in the event of professional debts, court judgments or tax reassessments. There is no separation between professional and personal assets.
Company (SARL/SAS): limited liability
By setting up an SARL or SAS, the professional limits their liability to the amount of their capital contributions. Their personal assets (residence, savings, personal property) are protected from the company’s creditors, except in cases of proven management fault.
This criterion is often decisive for high-risk professions (doctors, architects) or activities requiring significant investments.
Intermediate regimes
Single Professional Contribution (CPU)
The CPU is an optional regime available to individuals whose annual turnover does not exceed MAD 500,000 (service activities) or MAD 2,000,000 (commercial, industrial and craft activities), provided they are enrolled in the AMO health insurance scheme (Art. 41-II). Income tax is calculated at 10% on turnover multiplied by a coefficient specific to each profession, plus a supplementary duty intended for health coverage (Art. 40-I and 73-II-B-6°); the CPU covers income tax and the taxes due in respect of the activity, and is not subject to the minimum contribution. The annual return is filed before April 1, with annual payment or, on option, four quarterly instalments (Art. 82 quater-I and 173-I). Note, however, that regulated liberal professions (doctors, lawyers, architects, chartered accountants, etc.) listed by regulation are excluded from the CPU (Art. 41-III). This regime may suit professionals starting out or with modest income carrying out an eligible activity.
Auto-entrepreneur
The auto-entrepreneur status allows carrying out a professional activity under a simplified tax and social regime. The tax is calculated on collected turnover (not profit) at a rate of 1% for services (0.5% for commercial, industrial and craft activities). This status is capped at MAD 200,000 in annual turnover for service activities; above MAD 80,000 of annual turnover with a single client, the excess is subject to a final 30% withholding tax deducted by that client (Art. 42 bis and 73-II-G-8°). Regulated professions listed by regulation are excluded (Art. 42 ter-III).
This status suits secondary activities or professionals in the launch phase, but it is rarely optimal beyond a few years due to the absence of expense deductions.
Case study: doctor with MAD 800,000 profit
Dr Amina is a general practitioner in Casablanca. Her practice generates an annual net profit of MAD 800,000. She is deciding between maintaining her activity under IR or setting up an SARL.
Scenario 1: operating under IR
| Item | Amount (MAD) |
|---|---|
| Net taxable profit | 800,000 |
| IR (progressive scale) | (800,000 x 37%) − 27,400 = 268,600 |
| Effective rate | 33.6% |
Scenario 2: SARL under IS with salary/dividend optimisation
| Item | Amount (MAD) |
|---|---|
| Annual gross manager’s salary | 360,000 |
| Company profit after salary | 440,000 |
| IS (440,000 x 20%) | 88,000 |
| Net profit after IS | 352,000 |
| Dividend withholding (11.25% x 352,000) | 39,600 |
| Salary IR on 360,000 (after CNSS, AMO, professional expenses) | ≈ 88,600 |
| Total taxes and levies | 216,200 |
| Overall effective rate | 27.0% |
Annual saving: 268,600 − 216,200 = MAD 52,400, representing a saving of about 20% on the tax burden.
This scenario illustrates the major benefit of a corporate structure for high-income professionals. The optimisation relies on a balanced mix of manager’s salary and dividend distribution.
Frequently asked questions (FAQ)
From what level of profit is it better to switch to IS?
With 20% IS and full distribution as dividends (11.25% withholding in 2026), the overall burden comes to about 29% of profit: IR under the progressive scale only becomes heavier above about MAD 340,000 of annual net profit (single, no dependants). Below this threshold, individual practice generally remains more advantageous, all the more so as the company’s management costs (accounting, legal obligations) reduce the gain. A mix of manager’s salary and dividends can lower this tipping point.
Can a lawyer or doctor set up an SARL to practise?
Yes. Most regulated liberal professions can practise through an SARL, SARLAU or SAS in Morocco. Some professions impose additional conditions (professional body approval, exclusive corporate purpose).
What are the social contributions for an SARL manager?
The associate manager of an SARL is registered with CNSS as an employee if they pay themselves a salary. Contributions include: CNSS employee share (4.48% capped at MAD 6,000/month), AMO (2.26%), and the employer shares borne by the company. The manager thus benefits from health insurance coverage and CNSS retirement.
Can I revert to IR after opting for IS?
Dissolving the company allows reverting to individual practice under IR, but this operation entails tax consequences: taxation of the liquidation bonus, registration duties, and deregistration formalities. The choice of structure should therefore be settled from the outset.
READ ALSO:
- Professional income tax in Morocco
- Corporate tax in Morocco
- Auto-entrepreneur in Morocco
- Salary income tax in Morocco: 2026 scale
- Holding company in Morocco: complete tax guide
This article is written by the chartered accountants team at Upsilon Consulting, a firm registered with the Order of Chartered Accountants (OEC) of Morocco.
