In brief: Capital gains on disposals of fixed assets realized by companies subject to IS are taxable at the normal rate. A transitional regime (Art. 247-XXXV of the CGI, fiscal years 2022-2030) grants a 70% allowance on net capital gains, provided the holding period exceeds 8 years and the company reinvests the disposal proceeds in fixed assets within 36 months.
Definition and Calculation of Capital Gains on Disposal
A capital gain on disposal is the profit realized upon the sale of a fixed asset (land, buildings, equipment, goodwill, equity interests). It is defined by Article 9-I-C-1° of the CGI as the difference between the disposal price and the net book value (NBV) of the asset sold.
Capital gain = Disposal price − Net book value (NBV)
The NBV equals the acquisition cost less cumulative depreciation charged since the asset entered the balance sheet. For non-depreciable assets (land, securities), the NBV equals the acquisition cost.
Net Overall Capital Gain
The tax regime does not apply to each disposal individually but to the net overall capital gain (or net overall capital loss) for the fiscal year, i.e. the difference between:
- The total capital gains realized on all disposals during the fiscal year
- The total capital losses recorded
The tax regime applies to this net overall capital gain.
Standard Regime: Full Taxation
Under standard rules, the net overall capital gain on fixed asset disposals is fully subject to IS at the normal rate (20% or 35% depending on net taxable profit in 2026). There is no permanent progressive allowance schedule based on the holding period.
Transitional 70% Allowance (Art. 247-XXXV of the CGI)
Article 247-XXXV of the CGI establishes, on a transitional basis and by way of derogation from Articles 8 and 9 of the CGI, a 70% allowance applicable to the net capital gain realized on the disposal of fixed assets, for fiscal years opened during 2022 to 2030.
Cumulative Conditions
To benefit from this allowance, all of the following conditions must be met:
- Holding period > 8 years: the time elapsed between the acquisition date and the disposal date must be greater than eight years
- Reinvestment: the company commits to reinvesting the total disposal proceeds net of tax in fixed assets, within 36 months from the closing date of the disposal fiscal year
- Declaration: the company attaches to its tax return (Art. 20-I or 82-I) a form issued by the tax authorities stating the reinvestment commitment
- Tracking statement: a statement detailing the total disposal proceeds net of tax reinvested, the nature of the fixed assets acquired, their date and acquisition price, is attached to the tax return
- 5-year retention: the replacement fixed assets must be retained for at least 5 years from their acquisition date
Non-Compliance
If any of the above conditions is not met, the company’s situation is regularized under standard rules: the capital gain is reintegrated into the taxable result.
Calculation Example
A company disposes of a commercial premises in 2026, held for 10 years, and commits to reinvesting:
| Item | Amount (MAD) |
|---|---|
| Disposal price | 2,500,000 |
| Acquisition cost | 1,200,000 |
| Cumulative depreciation | 800,000 |
| NBV | 400,000 |
| Gross capital gain | 2,100,000 |
| 70% allowance (Art. 247-XXXV) | − 1,470,000 |
| Taxable capital gain | 630,000 |
The taxable capital gain of MAD 630,000 is included in the taxable result and subject to the applicable IS rate. The company must reinvest the disposal proceeds net of tax in fixed assets within 36 months and retain them for 5 years.
Engaging a chartered accountant is recommended to properly structure the transaction and secure the allowance.
Capital Gains Regime for Non-Resident Companies
Article 6-I-A of the CGI provides a specific regime for capital gains realized by non-resident companies:
Listed Securities (Excluding Real Estate Holding Companies)
Capital gains on the disposal of listed securities on the Moroccan stock exchange realized by non-resident companies are exempt from IS, provided the disposing company is not a real estate holding company (SPI).
An SPI is a company whose assets consist of more than 50% real estate or real property rights.
Other Disposals
Capital gains on real estate disposals or disposals of interests in SPIs remain taxable in Morocco through withholding tax or filing, subject to applicable tax treaties.
Capital Gains and Depreciation Provisions
Where a provision for impairment had been recorded on an asset disposed of at a capital gain:
- The reversal of the provision is a taxable income item
- The capital gain is calculated based on the NBV before the provision, so the reversed provision and the capital gain are cumulated in the taxable result
- The 70% allowance (Art. 247-XXXV) applies only to the disposal capital gain, not to the provision reversal
Impact on Non-Deductible Expenses
Certain non-deductible expenses may affect the capital gain calculation:
- Excess depreciation (passenger vehicles exceeding MAD 400,000 including VAT) is not taken into account in the tax NBV
- Non-deductible provisions do not modify the NBV for capital gain calculation purposes
Reference texts: General Tax Code 2026 — Art. 8, 9, 247-XXXV (PDF) — Circular Note No. 717 — IS (Volume 1)
Frequently Asked Questions
How does the 70% allowance on capital gains work?
The 70% allowance is a transitional regime (Art. 247-XXXV of the CGI, fiscal years 2022-2030). It applies to the net overall capital gain on fixed asset disposals, provided the holding period exceeds 8 years and the company reinvests the disposal proceeds net of tax in fixed assets within 36 months. The non-reduced portion (30%) is included in the taxable result and subject to IS.
What are the conditions for the 70% allowance?
Four cumulative conditions: (1) holding period > 8 years, (2) commitment to reinvest the disposal proceeds net of tax in fixed assets within 36 months, (3) declaration form attached to the tax return, (4) retention of the acquired fixed assets for at least 5 years. In case of non-compliance, the situation is regularized under standard rules (full taxation).
Are non-resident capital gains taxable in Morocco?
Capital gains on listed securities realized by non-residents are exempt, unless the disposing company is a real estate holding company (SPI). Real estate capital gains and disposals of interests in SPIs remain taxable, subject to bilateral tax treaties.
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