The Moroccan finance law for 2021 established a social solidarity contribution . The stated goal is to establish participation in the financing of the health insurance expansion project. The first phase concerns, in particular, informal workers.

This contribution was amended by the 2022 finance law. The 2023 finance law renewed the provisions that were planned for 2022. It therefore applies to tax packages for the 2023 financial year to be submitted before the end of March 2024.

The social solidarity contribution applies to both natural and legal persons.

For companies, the social solidarity contribution is calculated on the basis of the same amount of net profit used for the calculation of corporate tax and which is equal to or greater than one million (1,000,000) dirhams, under of the last closed financial year. For individuals, the aforementioned contribution is calculated on the basis of the net tax income(s) referred to in Article 267 above earned and which is equal to or greater than one million (1,000,000) dirhams, under of the last closed financial year.

Rate of social solidarity contribution

With regard to natural persons:

• The contribution applies to people who have a net annual income equal to or greater than 1,000,000 dirhams (2023 finance law);
• It is calculated on the basis of a progressive scale:
  • First, 1.5% on net income between 1 and 5 MDH,
  • Then, 2.5% between 5 and 40 MDH,
  • and finally, 3.5% beyond a net result of 40 MDH.

Social solidarity contribution rate for companies (subject to CIT)

Furthermore, with regard to companies subject to CIT , this contribution applies progressively to profits. The applicable scale is as follows:

1. 1.5% on profits between 1 and 5 MDH,
2. 2.5% between 5 and 40 MDH,
3. 3.5% beyond a net result of 40 MDH.

This article explains in detail the terms of application of this social contribution relating to the 2021 financial year.

Social solidarity contribution – Legal provisions

The scope of the social solidarity contribution

Article 267 of the general tax code (2021 version) establishes a social solidarity contribution. This contribution concerns:

• First, companies as defined in article 2-III above, excluding companies:
  • permanently exempt from corporate tax referred to in Article 6-IA above;
  • The rest repealed

• Then, natural persons with income:
  •  professionals as defined in article 30 (1° and 2°) above;
  • taxable agricultural crops as defined in article 46 above;
  • The rest repealed

The circular provides the following details:

• firstly, with regard to professional income, the contribution applies to the amount of net accounting profit or to the amount of the taxable base of professional income earned by taxpayers subject to the single professional contribution regime, reduced by amount of IR payable;
• Then, with regard to taxable agricultural income, the contribution applies to the amount of net accounting profit reduced by the amount of tax payable;
• Since 2022, only these two categories of income are concerned.

From the liquidation of the contribution

Article 268 of the CGI provides for

• companies , the aforementioned contribution is calculated on the basis of the same amount of net profit:
  • As it is taken for the calculation of corporate tax;
  • When it is equal to or greater than one million dirhams;
  • Furthermore, the income to be taken into consideration concerns the last closed financial year.
• natural persons , the contribution is calculated on the total annual income:
  • when it is from Moroccan source
  • the amount concerned is the amount net of taxes, made up of income acquired or realized .

Reporting obligations made available to taxpayers

The persons subject to the declaration are the following:

• First – regarding corporations:
  • the latter must submit a declaration (3 months after the end of the financial year concerned) by electronic means (teledeclaration on SIMPL-IS). This declaration must specify:
    • the net profit basis of calculation as referred to in article 268;
    • as well as the amount of the related contribution.
• Second – what concerns natural persons with professional, agricultural and/or land income :
  • the latter must submit a declaration, by electronic process (SIMPL-IR electronic declaration). This declaration must specify:
    • the income(s) net of tax referred to in article 268;
    • as well as the related contribution, before June 1 of 2021.
• Third – regarding salary income (repealed)

The generating event of the social solidarity contribution

Regarding companies:

• companies whose last accounting year coincides with the calendar year 2020, must subscribe to the aforementioned declaration within three (3) months following this closing date.
• For companies whose financial year is equine, they must subscribe to the aforementioned declaration for the financial year whose filing due date expires in 2021.

Example :

• A company whose closing date is 10/31: the 3-month period expires on 01/31/2021, the contribution must be paid before January 31, 2021
• A company whose closing date is 09/30: the 3-month period expires on 12/31/2020, the contribution must be paid before December 31, 2021

With regard to holders of professional, agricultural or land income:

Although neither the CGI nor the circular provides details on the income calculation exercise, the payment deadline has been set for June 1 of 2021. This suggests that the income concerned is that received on title of the 2020 financial year.

Indeed, it is difficult to imagine that the law places obligations in the hands of taxpayers concerning future income not yet acquired.

With regard to wage earners:

Repealed

Deductibility of CSS

Article 11-IV of the CGI specifies that the amount of the social solidarity contribution on profits and income is not deductible from the tax result .

For more information, download circular 731 relating to the 2021 LDF .