Moroccan investors who rent properties daily through digital platforms like Airbnb risk facing hefty tax audits if they fail to comply with the regulations outlined in the 2023 Finance Law, which imposes an income tax on real estate profits.
To avoid forced tax collection and associated fines, investors need to adopt a compliant tax strategy that includes the following:
Tax compliance is mandatory: Failing to declare your income from daily rentals can lead to audits and hefty fines from the Moroccan tax authorities.
Annual declaration is crucial: By March 1, Airbnb hosts must submit an annual declaration detailing all their income from daily rentals.
Withholding tax at source: A portion of rental income is set to be withheld at the source. Depending on earnings, this withholding tax can be 10% or 15%.
Calculating net income and deductions: Hosts can deduct 40% of their income for expenses related to their rentals. The remaining amount after deductions is considered their net taxable income.
Benefits of compliance: Registering a daily rental business and complying with tax regulations isn’t just about avoiding penalties. It can actually improve your profitability in the long run. A clear legal framework ensures smooth operations, electronic declarations simplify tax collection for hosts and the government, and proper compliance reduces the risk of tax evasion for everyone involved.
Daily rentals follow traditional regulations: It is important to note that daily rentals fall under the same regulations as traditional rentals. This includes obtaining a license under Decree No. 2.23.441 and using proper rental contracts, not car rental agreements.
Nationwide audit
The Exchange Office, in coordination with the tourism and interior ministries, launched a Nationwide audit of foreign transfers in April and identified significant undeclared income from rentals in major tourist cities like Casablanca and Marrakech. Some individuals reportedly earned over 100,000 dirhams monthly by renting multiple properties.
Authorities received the audit data and launched inspections in major cities to identify unlicensed rentals. The goal is to ensure compliance and proper licensing.
The Ministry of Tourism places great importance on advancing tourist accommodations, recognizing them as a critical link within the tourism value chain and a fundamental aspect of a tourist’s overall experience.
I wonder why hotels and tourism professionals don’t complain about Airbnb the way taxi drivers do about Indrive or other urban mobility apps that operate legally in the developed countries like our neighbor Spain.
Airbnb, Indrive and others represent a modern way of providing services, as opposed to the traditional methods that have proven their limitations in serving the growing urban population.