Morocco's tax authority has published detailed guidance on the 2026 Finance Law, introducing a broad sweep of reforms spanning corporate tax, personal income tax, VAT and registration duties — with measures targeting the informal economy, easing burdens on essential goods, and rolling out a phased withholding tax on property rentals.
Morocco’s tax administration (DGI) issued Circular No. 737 on 27 February 2026, clarifying the tax measures of Finance Law 50-25 for 2026, part of Morocco’s 2023–2026 structural tax reform.
Finance Law No. 50-25 was promulgated by Dahir No. 1-25-67 on 10 December 2025 and published in the Official Bulletin, largely unchanged from the draft finance law previously submitted to Parliament.
Circular No. 737 outlines a wide range of tax reforms and measures designed to integrate the informal sector, combat fraud, and stimulate investment. It details specific adjustments to corporate tax, personal income tax, value added tax (VAT), and registration duties. Key highlights include tax exemptions for the maritime industry, VAT relief on essential food items and agricultural inputs, and revised withholding tax protocols for real estate rentals.
The key tax reforms are as follows:
Corporate tax
- Microfinance institutions: To encourage the transformation of micro-credit associations into limited companies, these entities will transitionally benefit from common law tax rates (20% or 35%) for five years, rather than the 40% rate typically applied to credit institutions.
- Real estate capital gains: Non-resident companies must now declare and pay corporate tax on real estate capital gains within 30 days following the month of the sale, using a simplified model.
- Maritime exemption: Permanent exemption from withholding tax is granted for rental rights and analogous remunerations related to the chartering, leasing, and maintenance of vessels assigned to international maritime transport. This applies to payments made to non-residents starting 1 January 2026.
Value Added Tax (VAT)
Following a progressive reform started in 2024, the 2026 measures continue to expand exemptions for basic consumer goods and agricultural inputs.
- Essential food items: Short pasta (uncooked and non-stuffed) is now exempt from TVA without the right to deduction at both the internal and import levels.
- Health and medical: Blood and its derivatives used for human or animal medicine are granted full exemption with the right to deduction.
- Agricultural support: Exemption is extended to fertilisers and culture supports (as defined by Law 53-18) to reduce costs for farmers. Additionally, there is a temporary 2026 exemption for importing cattle (up to 300,000 head) and camels (up to 10,000 head) to stabilise market prices.
- Waste and recovery: Industrial transformation companies must now auto-liquidate TVA on purchases of industrial waste and scrap metals to ensure tax compliance in the recovery sector.
Registration duties
New measures target cash transactions and broaden the tax base for public contracts.
- Cash payment penalty: An additional 2% duty is applied to acts transferring real estate or business funds exceeding MAD 300,000 if the payment method is not justified (e.g., paid in cash or not through bank channels).
- Public markets: Public contracts for works, supplies, or services are now subject to a 0.1% registration duty, broadening the requirement to include subsidiaries of public enterprises.
- Real estate companies: The registration rate for transferring shares in real estate companies is reduced from 6% to 5% for harmonisation.
Revised withholding tax for property rentals
A significant structural change is the introduction of a 5% withholding tax on rental products. This applies to rentals of built and unbuilt property paid to legal entities or professionals.
For tenant companies, the withholding obligation will be introduced progressively based on turnover:
- 1 July 2026: Companies with a turnover of MAD 500 million or more.
- 1 January 2027: Companies with a turnover of MAD 350 million or more.
- 1 January 2028: Companies with a turnover of MAD 200 million or more.
The State, local authorities, and public enterprises must apply this withholding starting 1 July 2026, regardless of turnover.
Personal income tax
- Family charges: The annual reduction for family charges is increased from MAD 500 to MAD 600 per dependent. The maximum ceiling is raised from MAD 3,000 to MAD 3,600
- Casablanca Finance City (CFC): To attract talent, the 10-year period for the 20% flat tax rate for CFC employees no longer needs to be continuous, allowing for career breaks outside the CFC zone without losing the remaining benefit period.
- Business cessation: Professionals under the Unique Professional Contribution (CPU) regime who are at least 65 years old and lack a retirement plan receive a 50% abatement on capital gains from intangible assets when definitively ceasing activity.
Earlier, Morocco’s Council of Ministers presented the draft 2026 Finance Bill to the parliament on 20 October 2025.
