The Moroccan General Directorate of Taxes issued a new circular regarding the tax measures included in the 2022 Finance Bill, which includes provisions on corporate tax, income tax, added value tax, and registration fees.
In regards to the corporate tax, the directorate explained that the progressiveness of this tax has been canceled and its rate for companies operating in industrial activities has been reduced from 28% to 26%.
When it comes to income tax, the measures included adapting and improving the standardized professional contribution system, extending the application of incentives for obligors who declare income for the first time, and extending wage exemption to young people who work for the first time.
The circular of the Directorate General of Taxes additionally indicates that added-value tax is also subject to new measures for the year 2022, which includes the exemption of minerals from refunding added value tax without the right to deduction, and the appropriateness of the tax treatment in terms of added value tax for “takaful” insurance operations and “takaful” reinsurance with conventional insurance.
The 2022 Finance bill in relation to added value tax also includes an extension of the interest-free period on loans granted by banks to students of public institutions to finance their studies in Morocco or abroad, lowering the threshold for investment agreements concluded with the state, in addition to establishing the principle of tax neutrality on sale operations related to photovoltaic panels and solar water heaters.
For registration fees, the directorate clarified that the tax treatment of temporary insurance operations in the event of death in favor of the participating banks has been matched with the operations that are conducted in favor of traditional banks, in terms of tax on insurance contracts.
The circular included common tax measures, namely reducing the minimum contribution rate from 0.50% to 0.40% for companies with a negative return.
The 2022 Finance Law also includes measures to enhance the requirements of combating fraud and tax evasion, by strengthening the procedures for reviewing the total tax status of the obligated, and activating the Tax Violations Committee.
In addition, the requirements included valuing the tasks of the tax appeal committees at the local, regional and national levels, and consolidating tax neutrality in transactions related to the transfer of ownership of property from former territorial communities to the newly established ones, in addition to restoring social solidarity contribution to profits and income for the year 2022.
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