Here are the main provisions of Moroccan law of finance 2016:

 The corporate tax rate:

The rate of Income Tax was redesigned as follows:

–       Income taxable ≤ 300,000 DH: 10%.

–       Benefit taxable > 300,000 and ≤ 1 DH million: 20%.

–       Benefit taxable > 1,000,000 and ≤ 5 million DH: 30%.

–       Income taxable > 5 million DH: 31%

37% remains unchanged with regard to the credit institutions and assimilated institutions, Bank Al Maghrib, the Caisse de dépôt et gestion, insurance and reinsurance companies.

Please note that these rates do not apply per, but directly on the totality of the taxable profit depending on its amount.

Not posting the minimum income tax

The minimum income tax becomes permanently acquired to Public treasurer. Thus it will not be  possible to deduct minimum contribution from income tax.

Alignment of the imposition of alternative financing (murabaha, Ijara moutahia bitamlik) on those funded by conventional bank loans.

VAT:

The main provisions are:

–       The rate of VAT on train tickets which will increase from 14% to 20%, the same as that applied to certain foodstuffs as the but and imported barley.

–       The taxation of barter transactions and transfers of goods and second-hand movable goods consequential to a sale of commercial property carried out by taxable persons;

–       The exemption from VAT of decommissioning of aircraft operations.

–       The possibility of determining the annual deductible proportion distinctly for each sector when companies encompass areas of activity regulated differently under VAT,

–       Recovery of unrelated value-added tax: it comes to the ability to recover VAT on the purchase price of pulses, fruits and unprocessed vegetables, of local origin, intended for agri-food production sold locally.

Amendment of the rules relating to the payment by species of expenses in excess of 10,000 DH

–       Are deductible from taxable income in the limit of ten thousand (10,000) dirhams per day and per supplier within a limit of 100 000 dirhams in a month and for each supplier, the costs of the charges mentioned in article 10 (I – A, B and E) of CGI, whose payment is not justified by non-endorsable check, bills of Exchange, average magnetic payment, bank transfer, electronic method or by compensation with a debt against the same person.»

–       Does entitle more deduction, the tax charged on purchases, work or services exceeding ten thousand (10,000) dirhams per day and per supplier and which payment is not justified as mentioned before.

Social solidarity Contribution rate on deliveries to self-supply of construction of residential property

Tariff of 60 DH m2 in article 275, the CGI is replaced as follows:

Modification of penalties for failure or delay in the deposits of statements

The Financial Law imposed increasing rates of penalties according to the importance of the delay in the filing of statements of the taxable income of capital gains, total income, real profits, profits from movable capital, the turnover and acts and conventions.

A rate of 20% has been provided in the event of imposition by tax administration for failing to filing statement incomplete or insufficient, and 5% in the case of a corrective statement after the deadline, giving rise to payment of complementary.

Tax audit

Significant changes were made to tax audit procedures. We will come back further more detail on these provisions after publication of the circular of Tax Administration.

Period of limitation in the case of non-filing of tax return

The limitation period was increased to 10 years maximum (instead of 4 years earlier) for tax and penalty in case taxpayers have not filed their statement.

This provision has been the subject of many controversies including in the following cases:

–       Case of a taxpayer who voluntarily regularized his situation

–       This provision is retroactive or apply to fiscal years from 2016?