ADOPTION OF THE 2022 FINANCE LAW

The FA 2022 provides for a decrease from 0.5% to 0.4% of the minimum assessment rate for companies with current income excluding depreciation.

1. Common measures

● Reduction in the minimum assessment rate for recipient companies.

The FA 2022 provides for a decrease from 0.5% to 0.4% of the minimum assessment rate for companies with current income excluding depreciation. This change will apply to fiscal years beginning on or after January 1, 2022.

● Creation of the Regional Tax Appeal Commission and revision of the powers of the Local Taxation Commission (CLT)

A Regional Commission for Tax Appeals has been set up : it will be empowered to examine claims relating to rectifications in the area of income and profits from movable assets and the auditing of the accounts of taxpayers whose declared turnover, for each financial year of the audited non-barred period, is less than MAD 10 million.

The CLT will henceforth only deal with appeals relating to professional income determined according to the Single Professional Contribution (CPU) regime, to income and profits from real estate and to registration and stamp duties.

The FTA 2022 specifies that the CLT will continue to examine appeals submitted to them until 2021 and until the final establishment of the Regional Tax Appeals Commissions.

● Possibility of payment by bank deposit

Payments by bank deposit are now included in the list of payment methods for amounts over MAD 20,000.

Until 2021, payments for amounts over MAD 20,000 had to be made by unendorsed crossed check, commercial paper, magnetic payment device, bank transfer, electronic transfer or by offsetting against a claim against the same person.

Payments made by other means of payment are subject to a fine equivalent to 6% of the amount of the transaction.

It should be noted that customers making payment by bank deposits must be declared in the sales statement provided for in articles 20 and 82-1 of the CGI.

● 70% allowance on capital gains from the sale of fixed assets

The 2022 Finance Act provides for the introduction of a 70% allowance on capital gains on the sale of fixed assets, excluding land and buildings.

The benefit of this allowance is subject to the following conditions :

- the assets sold must be held for a period of more than eight years ;

- the company must undertake to reinvest the entire capital gain within a period not exceeding 36 months

- declaration by the company of the total amount of the transfer and identification of the assets acquired via the amount of the capital gains realized ;

- holding the assets acquired following the transfer for a period corresponding to at least five years.

Failure to comply with any of these conditions will result in the loss of the allowance and the regularization of the company's situation with respect to the capital gains recorded according to the rules of ordinary law.

● Cancellation of penalties and surcharges for tourist transport operations

The LF 2022 has introduced a provision to cancel the penalties and increases claimed by the tax authorities to companies operating in the field of tourist transport and subject to collection during the period from January 1, 2020 to December 31, 2021, which remains unpaid on December 31, 2021.

The benefit of this cancellation is conditioned by the payment of the principal before January 1, 2023.

● Institution of tax benefits for microcredit associations

The 2022 Finance Law introduced a measure guaranteeing microcredit associations a tax deferral on profits made from the contribution of capital securities to a public limited company in accordance with the provisions of law n°50-20 relating to microfinance.

The benefit of this advantage is subject to the following conditions

- the contributions must be the subject of an evaluation by an auditor;

- filing of a declaration with the tax authorities within 60 days containing the nature of the contributions by specifying their acquisition price and the amount of the capital gain noted within the framework of the contribution operation as well as the amount of the tax benefiting from the tax deferral ;

- commitment by the association to pay the amount of tax deferred within 60 days of the date of transfer, withdrawal or disposal.

2. With respect to corporate income tax (CIT)

● Abolition of the progressivity of the IS

The corporate income tax rates remain unchanged (see below) but instead of being progressive, they are now proportional.

 

Taxable income (dirhams) 

Rates

Less than or equal to 300 000

10 %

Between 300 001 and 1 000 000

20 %

More than 1 000 000

31 %

For example, for a taxable income of MAD 700,000, the applicable tax rate will be 20% on the entire taxable income instead of 10% for MAD 300,000 and 20% for MAD 400,000.

● Reduction of the corporate tax rate applicable to industrial companies

A reduction in the corporate tax rate applicable to companies in the industrial sector whose net profit is less than MAD 100 million.

From now on, these companies will be subject to an IS rate of 26% instead of 28% in the past.

3. In terms of income tax (IR)

● Simplification of the calculation methods in terms of CPU

The LF 2022 provides for a standardization of the Single Professional Contribution by reducing the number of categories of professions and coefficients for determining the taxable base. The number of categories of professions is now reduced to four (4): trade, provision of services, manufacturing, trade and specific activities.

Extension of the incentive for first-time taxpayers to identify themselves for tax purposes

The system allowing taxpayers carrying out an activity subject to income tax and identifying themselves for the first time with the tax authorities, to be subject to tax only on the basis of income and transactions carried out as from this identification has been extended to 31 December 2022.

● Extension of the period of application of the abatement reserved for professional athletes

Extension of the tax deduction system granted to professional athletes for their income until 2026.

As a reminder, the deduction system previously provided for an application as follows:

- 90% for the year 2021 ;

- 80% for the year 2022 ;

- 70% for the year 2023;

- 60% for the year 2024.

 The 2022 Finance Act now provides for the application of the abatement as follows:

- 90% for the years 2021, 2022, 2023 ;

- 80% for the year 2024;

- 70% for the year 2025;

- 60% for the year 2026.

● Extension of the exemption for newly hired employees

Extension of the derogatory income tax exemption scheme for newly hired employees between January 1, 2021 and December 31, 2022.

This system, adopted within the framework of the 2021 Finance Act, was only intended for employees recruited during the year 2021.

4. Social solidarity contribution

Return of the social solidarity contribution for companies subject to corporate income tax

This contribution will apply to companies and individuals with professional or agricultural income determined according to the real net income regime and whose net profit exceeds 1 million dirhams at the following rates :

Net profit (dirhams)

Rates

From 1 000 000 to less than 5 000 000

1,5 %

From 5 000 000 to less than 10 000 000

2,5 %

From 10 000 000 to less than 40 000 000

3,5 %

More than 40 000 000

5 %

Companies that are permanently exempt from corporate income tax are excluded from the scope of application of this contribution.

As a reminder, the social solidarity contribution was initially intended to apply only for the year 2021.

5. With regard to VAT

● Introduction of VAT neutrality for sales transactions involving photovoltaic panels and solar water heaters

Application of VAT at a rate of 10% to the acquisition of photovoltaic panels and solar water heaters locally and on import.

This measure aims to enshrine the neutrality of TVA for operators and also to develop the use of photovoltaic panels and solar water heaters by enjoying a reduced rate.

● VAT exemption on recovered metals.

The LF 2022 has extended the benefit of the TVA exemption without the right to deduct to sales involving recovered metals.

Until 2021, sales relating to recovered metals were subject to VAT at a rate of 20%.

● VAT exemption on services performed by insurance/reinsurance companies.

Introduction of an exemption without the right to deduct benefiting the provision of services performed in the context of Takaful insurance and Takaful reinsurance operations (participatory insurance).

As a reminder, until 2021, this exemption only benefited services performed by insurance/reinsurance companies subject to the tax on insurance contracts (Takaful insurance was excluded).

● TVA exemption on loans granted to students

The loans granted to students of private, public education or vocational training in the context of their studies in Morocco or abroad will benefit from a VAT exemption without the right to deduct.

● TVA exemption for the manufacture of photovoltaic panels

The products and materials used in the manufacture of photovoltaic panels acquired by the manufacturers of these panels are now exempt from TVA with right to deduct.

● Decrease in the exemption threshold for companies that carry out investment projects

The LF 2022 provides for a TVA exemption for companies that proceed to the realization of investment projects, subject to agreements with the State and involving an amount greater than or equal to 50 million dirhams. As a reminder, this exemption threshold was MAD 100 million.

The downward revision of this threshold also applies to capital goods needed to carry out investment projects imported from abroad.

6. Other tax measures

● Expansion of the scope of the insurance tax

Introduction of the tax on insurance at a rate of 10% to insurance operations covering the risk of death, subscribed for the benefit of lending organizations or for the benefit of participatory banks.

● Introduction of an air tax of solidarity and tourist promotion

Creation of a new tax integrated into air tickets for all international flights departing from Morocco.

This tax applies to all travelers with the exception of:

- persons working on board the aircraft

- children under the age of 2 ;

- passengers in direct transit making a temporary stop and leaving on the same flight ;

- passengers in transit for a period not exceeding 24 hours ;

- passengers transiting through a Moroccan airport following an emergency landing.

The amount of this tax is set at MAD 100 for economy class flights and MAD 400 for first and business class flights.

This tax will be payable by airlines who will have to pay it spontaneously to the tax authorities.

Airlines resident in Morocco will have to declare and pay the tax monthly electronically to the tax authorities.

Non-resident airlines without a head office in Morocco must file a monthly report with the National Agency of Airports. They will have to pay the amount of the tax at the time of the deposit of the report with this agency.

The National Airports Agency will be responsible for transferring the amount of tax collected from non-resident companies to the tax authorities in the month following the collection of the tax.

7. Customs

● Import duty on ethylene terephthalate plastic reduced from 10% to 2.5

The import duty on ethylene terephthalate type plastic is being reduced from 10% to 2.5%.

 ● Introduction of the domestic consumption tax (TIC) to certain electronic devices.

The LF 2022 provides for the application of the ICT to the following electronic devices :

PRODUCT DESIGNATION

QUOTITÉS

Televisions :

- Screens of 32 inches or less

- Screens over 32 inches

 

- 00 dirham the unit

- 150 dirham the unit

Laptop computers

50 dirhams l’unité

Other desktop computers :

- With monitor

- Without monitor

- Computer monitor

- Tablets

 

- 50 dirham the unit

- 30 dirham the unit

- 20 dirham the unit

- 30 dirham the unit

Cell phones :

- Smartphones

- Other phones

 

- 50 dirham the unit

- 00 dirham the unit

Battery for vehicles excluding wheelchairs made especially for people with special needs and bicycles and motorcycles and scooters

50 dirhams the unit

It should be noted that these devices were not subject to ICT in the past.

● Introduction of import duties for raw materials used in the treatment of diabetes

Application of a 2.5% import duty to raw materials used in the treatment of diabetes.

Until 2021, these raw materials were not subject to import duties.