Taxation of hotels in Morocco


How does taxation of hotels work in Morocco? What tax advantages do hotels and touristic establishments benefit from ?

Hotel companies and tourist establishments in Morocco benefit from tax incentives. Indeed, these establishments benefit from two main advantages:

  • First: a reduced VAT rate
  • Second: a reduction in corporate income tax on sales in foreign currencies

Taxation of hotels and touristic establishments – Corporate Income Tax

Hotels and touristic establishment benefit from an advantageous tax system in terms of corporate income tax. However, the tax incentive only applies to the proportion of the CIT tax base corresponding to the turnover made in foreign currency.

To be more accurate, the tax basis that benefits from a tax reduction is:

  • The turnover made in foreign currency
  • Duly repatriated:
    • Either directly (through wire transfer or credit card)
    • Or via travel agencies

Hotels in Morocco : Corporate Income Tax advantages

Hotels and similar touristic establishments benefit, under the provisions of Article 6-I-B-3 of the General Tax Code (GTC), from :

  • A 5-year total exemption from CIT
  • A reduced marginal tax rate which is capped at 20% (instead 31% under common law)

To know how to determine the tax of a hotel that has a turnover in both dirhams and foreign currency, read our detailed article: Income Tax calculation : Progressive scale

Which establishments are eligible to this tax advantage ?

Only establishments designated in the Law 61-00 can benefit from the previous tax advantages.

This law defines tourist establishments as: “any commercial establishment, which receives a passing clientele and to which it provides :

  • Accommodation services
  • Catering
  • Beverage and entertainment

Note Article 3 of the same law requires these establishments to be categorized according to specific criteria.

In addition, Article 2 of this law defines the list of hotel establishments. Thus, we can find the following classification:

  • Hotels
  • Motels
  • Residential hotels
  • Real estate residences for touristic promotion
  • Hotel clubs
  • Hostels
  • Guesthouses
  • Boarding houses
  • Camping caravanning
  • Shelters
  • Cottages

As such, from a taxation point of view, all establishments that meet the criteria of this text are eligible for the above-mentioned tax benefits.

Definition of a foreign currency turnover (Article 6 of the GTC)

The above exemption is conditional on:

  • First, a foreign currency turnover
  • Second, the repatriation of said foreign currency:
    • Either directly by the establishment
    • Or indirectly, by travel agencies

The turnover eligible for the above tax benefit is, therefore, the turnover that the hotel receives:

  • Directly, from a foreign bank account to its local account
  • By international credit card
  • By Travelers’ cheques and foreign cheques

Moreover, note that turnover collected in foreign currency by travel agencies on behalf of a hotel also benefits from the tax exemption. Indeed, even though the agency pays the hotel in dirhams, the receipt by the agency takes precedence.

During a tax audit, hotels must present:

  • Formules 2 and certificates of receipt in foreign currency, provided by the bank;
  • Certificates for credit card receipts, provided by CMI;
  • Certificates provided by travel agencies, if any

Note, however, that Circular 717 requires for amounts transiting through a travel agency:

  • On the one hand, that the establishment issues an invoice supported by a reservation voucher
  • On the other hand, that the invoice bears the mention “non-resident customer”.

Moreover, the circular specifies that the administration can challenge the tax advantage if the currencies are not repatriated within the time limits provided for by the exchange regulations.

Details on the duration of the exemption

The circular 717 of the DGI (Direction Générale des Impôts) specifies that the duration of the exemption concerns a period of 60 consecutive months from the first accommodation operation. Furthermore, the merger or disposal of an establishment does not undermine the five-year exemption.

Taxation of hotels and touristic establishments – VAT

Under the provisions of article 89 of the GCT: “Accommodation operations and/or sale of food products or beverages to be consumed on premises” are taxable for VAT.

This taxation concerns both, turnover in foreign currency and in Moroccan dirham. Indeed, the services being consumed in Morocco, the taxation remains with to the Treasury.

However, accommodation and catering services benefit from a VAT reduced rate of 10%.

This reduced rate of 10% applies to all miscellaneous income. As such, the following are also taxable at the rate of 10%:

  • On site catering
  • Phone services
  • Foreign exchange commissions
  • Laundry services
  • Renting of safes

However, note that rental of premises to external service providers (stores, currency exchange offices, etc.) remain taxable at the standard rate of 20%.

Taxation of hotels – Local taxes

The hotel business is subject to specific local taxes that are detailed in this section.

Tourist Tax

This is an ad valorem tax (added to the sales invoice at the customer’s expense). Hotels must collect this tax per night and per person.

The rate of the tourist tax is as follows (Article 130 of Law 30-89 on the taxation of local collectivities):

  • On the one hand, for guesthouses, palais des congrés and luxury hotels, it varies between 15 and 30 MAD (depending on the collectivity)
  • On the other hand, for hotels, it depends on their category (stars)
    • First category : 5 stars – From 10 to 25 MAD
    • Second category : 4 stars – From 5 to 10 MAD
    • Third category : 1 and 2 stars – From 2 to 5 MAD
    • Fourth category : Private clubs – From 10 to 25 MAD
    • Fifth category : Holiday resorts – From 5 to 10 MAD
    • Sixth category : Touristic residences – From 3 to 7 MAD
    • Finally, for all other categories, it varies from 2 to 5 MAD

Touristic promotion tax

Decree 2-79-749 introduced in 1979 a tax for the benefit of the Moroccan National Tourist Office, a parafiscal tax called “tourist promotion tax”. This touristic promotion tax payable per night per person as follows:

  • First category : Luxury Hotels – 15 MAD
  • Second category : 5-stars hotels and first class guesthouses – 11 MAD
  • Third category : 4-stars hotels and second class guesthouses – 8 MAD
  • Fourth category : 3-stars hotels, touristic residences, and motels – 5 MAD
  • For 2-stars and 1-star hotels – 4 and 2 MAD
  • Finally, hostels, boarding houses, shelters and cottages – 1 MAD

Beverage tax

Beverage tax applies to the operators of:

  • Cafés
  • Bars
  • And in general, any drinks consumed on the premises.

In addition, this tax applies to beverages to be consumed on the premises whether they are alcoholic or not. It varies between 2% and 10% depending on the collectivity.


Professional Tax in Morocco

Withholding tax on Foreign services (Hotels case study)