In brief: Withholding tax in Morocco applies to three categories: dividends (12.50% in 2025), fixed-income products (20% for legal entities), and gross income paid to non-residents (10%). The tax is triggered upon payment, making available, or recording in an account.
Understanding Income Subject to Withholding Tax
Withholding tax in Morocco is a key mechanism within the Moroccan tax system. Certain types of income that companies subject to Corporate Tax pay to third parties must be subject to withholding tax. Article 4 of the General Tax Code lists these types of income. This mechanism allows the State to secure tax collection upstream, directly at the time the relevant income is paid.
Articles 158 to 170 of the General Tax Code (CGI) govern the entire withholding tax regime, specifying the products concerned, the applicable rates, reporting obligations, and payment procedures.
What Income Is Subject to Withholding Tax?
Article 4 of the General Tax Code stipulates that three types of income paid by a company to third parties must be subject to withholding tax. These are:
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First, income from shares, equity interests, and similar revenue;
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Second, fixed-income investment products;
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Third, gross income received by non-resident individuals or legal entities.
In all three cases above, the withholding tax obligation falls on the paying party. However, in certain cases, this obligation falls on a third party (e.g., a bank, authorized intermediaries, etc.).
Income from Shares, Equity Interests, and Similar Revenue
This first category of income subject to withholding tax primarily covers dividends and similar distributions. It includes dividends distributed by corporations, liquidation surpluses, income distributed by UCITS (Undertakings for Collective Investment in Transferable Securities), as well as directors’ fees and attendance tokens.
The withholding tax rate applicable to dividends has undergone a progressive evolution. Since the 2025 Finance Law, a single rate schedule applies to all dividends paid, regardless of the year in which the underlying profits were generated. The rate is set at 11.25% for 2026, continuing the planned downward trajectory to 10% from 2027 onward.
This withholding is a final tax for resident individuals. However, for resident legal entities subject to Corporate Tax, the withholding is offset against the tax due, with the possibility of a refund for any excess.
Fixed-Income Investment Products
Fixed-income investment products constitute the second category subject to withholding tax. These include interest on bonds and Treasury bills, interest on term deposits, interest on certificates of deposit, interest on blocked accounts, and income from Sukuk certificates as referred to in Article 14-bis of the CGI.
The withholding tax rate on these products varies depending on the status of the beneficiary. For resident legal entities subject to Corporate Tax, the rate is 20% and is non-final. The amount withheld is therefore offset against the Corporate Tax owed by the beneficiary company. For resident individuals, the rate is 30% and constitutes a final withholding tax.
Credit institutions and similar organizations act as paying parties for bank interest. They are required to withhold the tax and remit it to the Treasury.
Gross Income Paid to Non-Residents
The third category covers payments made to non-resident individuals or legal entities in Morocco. Article 15 of the CGI provides an extensive list of these gross products, which includes royalties for the use of copyrights, patents, designs, and models, fees for providing scientific or technical information, payments for technical assistance or the provision of personnel, payments related to artistic or sporting activities carried out in Morocco, and fees for services of any kind used in Morocco or provided by non-residents.
The withholding tax rate applicable to gross income paid to non-residents is generally 10%. However, this rate may be reduced or eliminated under international tax treaties signed by Morocco. The Kingdom has signed over 60 double taxation agreements, which can significantly modify the effective applicable rate.
Summary of Withholding Tax Rates
To summarize the main withholding tax rates currently in force in Morocco, here is a breakdown by product category. Dividends and distributions are subject to a rate of 11.25% in 2026. Interest paid to resident legal entities is subject to a non-final rate of 20%. Interest paid to resident individuals is subject to a final rate of 30%. Gross income paid to non-residents is taxed at 10%. Finally, commissions, brokerage fees, and professional fees paid to residents are subject to a 10% levy.
These rates are subject to change each year based on the provisions of the Finance Law.
What Is the Triggering Event for Withholding Tax?
The triggering event for withholding tax is the payment of the said income. However, this event may also be triggered by either:
- Making the funds available
- or recording the income in an account.
Let us analyze the provisions of Circular 717 regarding these three concepts.
First, Payment
Payment, as defined in the circular, refers to the direct transfer of funds into the hands of the beneficiary. It constitutes an actual payment in cash to a bank account or in cash.
Second, Making Funds Available
Making funds available means that the paying company holds the funds at the disposal of the beneficiary.
The funds are considered to have been made available when the payer can no longer retract the amount to be distributed. As a result, the law treats this as equivalent to an actual payment.
Example: If an Ordinary General Meeting decides to distribute dividends and sets an entitlement date, that entitlement date constitutes the date when funds are made available. The company cannot retract the dividend payment after this date. Conversely, if the decision includes a condition precedent, the funds are deemed to have been made available on the date the condition is met.
Finally, Recording in an Account
Recording in an account is a concept that was introduced into the General Tax Code in 2011.
This concept is defined in the General Tax Code in its current version (2026) as either:
- First, recording in a partner’s current account. A dividend recorded in a current account acts as a triggering event for the withholding tax payment;
- Second, recording in a bank current account. This case refers to a paying party that would be a credit institution.
The withholding tax remains due whether the payment is made in cash or in kind.
In certain cases, a gratuitous waiver of payment could be interpreted by the tax authorities as equivalent to a payment.
Reporting Obligations and Payment Deadlines
The paying party that applies the withholding tax must comply with strict reporting obligations. It must file a declaration of the income subject to withholding with the tax authorities, accompanied by the corresponding payment.
The deadline for remitting the withholding tax is set at the end of the month following the month in which the payment, making available, or recording in an account took place. For example, a withholding applied in March must be paid to the Treasury by the end of April.
The declaration must include the identity of the income beneficiary, the nature and gross amount of the income paid, the withholding rate applied, and the amount of the withholding. Failure to comply with these obligations exposes the paying party to surcharges and penalties provided for in the CGI.
Offsetting and Refund of Withholding Tax
Withholding tax borne by a resident company subject to Corporate Tax is offset against the tax due for the fiscal year in which the withholding was applied. When the withholding amount exceeds the Corporate Tax due, the excess is refundable to the beneficiary company upon request.
For individuals, whether the withholding is final or non-final determines the tax treatment. If the withholding is final, it constitutes the definitive tax and the related income is not included in the taxable base for Income Tax. If it is non-final, the withholding is offset against the overall Income Tax due.
Exemptions and Reduced Rates
Certain types of income benefit from exemptions or reduced withholding tax rates. Dividends distributed between companies belonging to the same group may, under certain conditions, benefit from an exemption under the parent-subsidiary regime. Non-profit organizations and certain public institutions may also be exempt.
Furthermore, international tax treaties signed by Morocco often provide for reduced rates on dividends, interest, and royalties paid to residents of partner countries. It is therefore essential to verify whether an applicable treaty exists before applying the standard rate.
Frequently Asked Questions
What types of income are subject to withholding tax in Morocco?
The main categories of income subject to withholding tax in Morocco include dividends and other distributions of profits, interest on loans and deposits, royalties and licence fees, and remuneration for services rendered by non-resident companies. The applicable rate varies depending on the nature of the income and the existence of a tax treaty.
When is withholding tax triggered in Morocco?
Withholding tax is triggered at the time of payment, making available, or recording in an account of the income concerned. This includes recording dividends in a shareholder’s current account. The withholding tax is due regardless of whether the payment is made in cash or in kind.
Can withholding tax be offset against Corporate Tax in Morocco?
Yes, withholding tax borne by a resident company subject to Corporate Tax is offset against the tax due for the fiscal year in which the withholding was applied. If the withholding amount exceeds the Corporate Tax due, the excess is refundable upon request.
What are the filing deadlines for withholding tax in Morocco?
Entities that withhold tax must file a declaration and remit the amounts withheld to the tax authorities within the month following the quarter in which the withholding was applied, using the specific form provided by the General Tax Administration. For certain categories of income, such as salaries and wages, the declaration and payment are due on a monthly basis, by the end of the month following the one in which the withholding occurred. Late filing or payment triggers automatic penalties and late-payment interest as provided under the General Tax Code.
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