In brief: In Morocco, stock options granted by a company to its employees by decision of the extraordinary general meeting benefit from a specific regime (Art. 57-14° GTC). The employer contribution (“abondement”: the difference between the share value at grant and the price paid) is exempt if it does not exceed 10% of that value, and the gain between grant and exercise is taxed as an acquisition gain under investment income and gains, on the sale of the shares, at 15% (listed) or 20% (unlisted), provided the registered shares are held for 3 years after exercise. The portion of the contribution above 10%, or the entire benefit in the event of an early sale, is taxed as additional salary under the IR scale. Shares acquired under these plans cannot be held in a PEA or PEE.
Definitions: Stock Options and Free Shares
Stock Options (Share Purchase/Subscription Options)
Stock options are rights granted by a company to its employees or directors allowing them to purchase company shares at a predetermined price (exercise price) during a specified period. The benefit lies in the difference between the exercise price (generally favorable) and the fair market value of the share at the time of exercise.
Free Share Grants (AGA)
Free share grants allow a company to allocate shares to its employees without financial consideration. The employee acquires the shares after an acquisition period (generally 2 to 4 years), often accompanied by an additional holding period.
Free shares do not fall within the regime of Article 57-14°, which is reserved for share subscription or purchase options. According to the tax authorities, the benefit they confer constitutes additional salary subject to IR under the ordinary rules (Art. 56; Circular Note No. 717); the subsequent capital gain on their sale falls under investment income and gains (Art. 66-II-A), except in the case of shares in unlisted real-estate-predominant companies or in transparent real estate companies. The employer reports them in the statement attached to the salary and wages return (Art. 79-III).
These compensation mechanisms are increasingly used in the startup ecosystem, particularly those operating under the Casablanca Finance City (CFC) regime, to attract and retain talent.
The Dual Taxation of Stock Options
The tax regime for stock options in Morocco is characterized by taxation in two stages, corresponding to two distinct economic events.
Stage 1: Taxation at Option Exercise (Art. 57-14°)
When the beneficiary exercises their option, taxation depends on compliance with the conditions of Article 57-14° GTC (plan decided by the extraordinary general meeting, contribution ≤ 10%, registered shares held for 3 years after exercise):
- Compliant plan: the employer contribution (share value at grant − price paid) is exempt, and the difference between the value at exercise and the value at grant is not taxed at exercise. It constitutes an acquisition gain taxed on the sale of the shares, under investment income and gains
- Contribution above 10%: the excess portion is additional salary taxed under the progressive IR scale for the year of exercise; the employer applies withholding tax on that portion
- Sale before the end of the 3-year period: the exempt contribution and the acquisition gain are requalified as additional salary, with late-payment penalty and surcharge (Art. 208), except in the event of the employee’s death or disability
Stage 2: Taxation at Sale (Securities Capital Gain)
When the beneficiary sells the acquired shares, two gains are taxed under investment income and gains: the acquisition gain (share value at exercise − value at grant), whose taxation was deferred to the sale (Art. 57-14°), and the capital gain on sale (sale price − value at exercise). The rates are as follows:
| Type of Securities | Tax Rate |
|---|---|
| Listed shares | 15% |
| Unlisted shares | 20% |
This gain falls under the securities capital gain regime and not under salary income. It is exempt where the total amount of securities sales made in the calendar year does not exceed MAD 30,000 (Art. 68-II). Where the employer goes public, it also benefits from a 25% or 50% corporate tax reduction for three fiscal years.
Summary of Dual Taxation
| Phase | Tax Base | IR Category | Rate |
|---|---|---|---|
| Option exercise | Employer contribution above 10% of the value at grant (only) | Salary income | Progressive scale (0% – 37%) |
| Share sale | Sale price − Value at grant (acquisition gain + capital gain on sale) | Securities capital gain | 15% (listed) / 20% (unlisted) |
Exemptions and Favorable Regimes
Exemption of the Employer Contribution Under Conditions (Art. 57-14)
Article 57-14 of the GTC provides for an exemption of the employer contribution (“abondement”) borne by the employing company when granting share subscription or purchase options, under certain conditions:
- The employer contribution (the difference between the share value at the grant date and the price paid by the employee) must not exceed 10% of the share value at the grant date; the excess portion is taxed as additional salary under the IR scale.
- The acquired shares must be in registered form and must not be sold before a 3-year lock-up period from the date the option is exercised.
- The grant must have been decided by the extraordinary general meeting.
Equity Savings Plans — PEA (Art. 68-VII)
Income and gains realized within an Equity Savings Plan (PEA) (listed shares of Moroccan companies, attached rights, equity UCITS) are exempt from IR if the contributions and income are kept in the plan for at least 5 years from its opening and contributions do not exceed MAD 2,000,000. Otherwise, the plan is closed and the gain is taxed at 15%. Note: shares acquired through share subscription or purchase options benefiting from Article 57-14° are excluded from the PEA.
Company Savings Plans — PEE (Art. 68-VIII)
Similarly, income and capital gains generated within a Company Savings Plan (PEE) are exempt from IR if the invested amounts remain locked in for a minimum period of 5 years. This scheme encourages long-term employee savings and staff retention. As with the PEA, shares acquired through options benefiting from Article 57-14° are excluded.
Practical Implications for Startups and CFC
The Moroccan startup ecosystem and companies benefiting from Casablanca Finance City (CFC) status increasingly use stock options to compensate their teams. Several specificities deserve attention:
CFC Regime and Stock Options
CFC companies benefit from a 20% corporate tax rate on their taxable profit. Their employees, other than those of credit institutions and insurance and reinsurance companies, are automatically taxed at the final rate of 20% on their gross salaries and wages for a maximum period of 10 years from the start of their duties, whether continuous or not (Art. 73-II-F-9° GTC, 2026 Finance Act). This rate only concerns the portion of the benefit requalified as salary (contribution above 10%, early sale). The employee may nonetheless elect, with the employer and before 1 February of the year concerned, for taxation under the progressive scale (up to 37%) where advantageous.
Valuation of Unlisted Shares
For unlisted startups, determining the fair market value at the exercise date poses a practical challenge. The tax authorities may challenge the valuation used if it does not reflect the true market value of the shares. It is recommended to use an independent valuation (DCF method, market multiples, or adjusted net assets) to secure the tax position.
Optimal Structuring
To optimize the taxation of stock options in startups, several strategies may be considered:
- Set the exercise price close to fair market value at the time of grant so that the employer contribution stays within the 10% limit and no additional salary is taxed at exercise.
- Comply with the conditions of Article 57-14° (decision of the extraordinary general meeting, contribution limited to 10%, registered shares held for 3 years after exercise) so that the acquisition gain is taxed on the sale at the proportional rate rather than under the scale; shares from these plans cannot be held in a PEA or PEE.
- Stagger option exercises over several fiscal years where the contribution exceeds 10%, to smooth out the progressivity of the IR scale on the excess portion.
- Plan the sale taking into account the rate differential between listed (15%) and unlisted (20%) securities.
Employer Obligations
The company implementing a stock option or free share grant plan has specific filing obligations:
- Declaration of grants: the employer must inform the tax authorities of the plans implemented, the beneficiaries, the number of options or shares granted, and the exercise price.
- Withholding at source: for the year of exercise, the employer withholds IR only on the portion of the contribution above 10% (and, in the event of a sale before 3 years, on the benefit requalified as salary) and remits it to the DGI via the SIMPL platform.
- Annual statement: a statement of beneficiaries (number of shares, grant and exercise dates, value at those dates, acquisition price, amount of the contribution) is attached to the annual salary and wages return (Art. 79-III).
- Beneficiary information: the employee must receive a summary detailing the share value at grant and at exercise, the contribution, any withholding applied, and the terms for future sale.
Practical Case: Stock Options in a CFC Startup
A developer employed by a CFC startup receives 1,000 stock options under a plan decided by the extraordinary general meeting. At the grant date, the share is worth 55 MAD and the exercise price is 50 MAD. Three years later, they exercise their options when the fair market value is 200 MAD per share. They keep their registered shares for three years after exercise, then sell them at 280 MAD each.
| Phase | Calculation | Amount (MAD) |
|---|---|---|
| Option exercise | ||
| Employer contribution: (55 − 50) × 1,000, i.e. 9.1% of the value at grant | Exempt (≤ 10%, Art. 57-14°) | 5,000 |
| IR at exercise | No additional salary | 0 |
| Share sale | ||
| Acquisition gain: (200 − 55) × 1,000 | Taxed on sale | 145,000 |
| Capital gain on sale: (280 − 200) × 1,000 | 80,000 | |
| IR on investment gains (20%, unlisted) | 225,000 × 20% | 45,000 |
| Total IR | 45,000 |
The employee’s total gain is 230,000 MAD (5,000 exempt contribution, 145,000 acquisition gain, 80,000 capital gain on sale), with IR of 45,000 MAD payable on the sale. Had the contribution exceeded 10% or had the shares been sold within three years, the amounts concerned would have been taxed as additional salary (at the 20% rate applicable to CFC employees, or under the scale by election), with a late-payment penalty and surcharge in the case of an early sale.
READ ALSO:
- Securities Capital Gains in Morocco
- Securities Income in Morocco
- Salary IR in Morocco: 2026 Scale and Calculation
Frequently asked questions
Are stock options taxed even if I do not sell the shares?
It depends on the plan. If the conditions of Article 57-14° are met (decision of the extraordinary general meeting, contribution ≤ 10%, registered shares held for 3 years after exercise), exercise triggers no IR: the contribution is exempt and the gain between grant and exercise is taxed only on resale, together with the capital gain on sale. Only the portion of the contribution above 10% is taxed as salary for the year of exercise, without you having sold. If the shares are sold within three years, the benefit is requalified as salary.
How is fair market value determined for unlisted companies?
In the absence of a stock market price, the fair market value is determined through a financial valuation taking into account the net book value, profitability prospects and recognized valuation methods (DCF, comparables, adjusted net assets). A documented valuation at each key date (grant and exercise) supports the contribution and acquisition gain reported.
Can I benefit from the PEA exemption for shares received through stock options?
No. Article 68-VII GTC expressly excludes from the PEA shares acquired through share subscription or purchase options benefiting from the Article 57-14° regime; the same exclusion applies to the PEE (Art. 68-VIII). Gains on these shares follow the stock-option regime: exemption of the contribution up to 10% and taxation of the acquisition gain and the capital gain on sale upon resale.
What are the implications for [securities income](/revenus-capitaux-mobiliers-maroc/)?
Dividends received on shares held following an option exercise constitute securities income subject to a final withholding tax at the rate of the year of distribution: 11.25% in 2026 (10% from 2027). This income is separate from the employer contribution, the acquisition gain and the capital gain on sale.
