The 2026 Finance Bill introduces broad tax reforms, including expanded corporate and personal income tax withholding, new VAT exemptions for specific goods and investments, the launch of a petroleum product marking system, and the introduction of a carbon tax. 

Regfollower Desk

Morocco’s Council of Ministers has presented the draft 2026 Finance Bill to the parliament on 20 October 2025.

Morocco’s 2026 Finance Bill aligns with King Mohammed VI’s vision of “Emerging Morocco,” focusing on economic growth, social equity, and balanced regional development. The proposed key measures aim to boost investment from both domestic and international sources while providing targeted support to very small, small, and medium-sized enterprises. Regional development programmes are set to play a pivotal role in job creation, improving education and healthcare, and modernising less developed areas.

Social protection is a cornerstone of the bill, with plans to increase child allowances, extend support for orphans, expand retirement and unemployment benefits, and continue housing assistance initiatives.

The key changes include:

Corporate income tax changes

  • Expanded withholding scope: Withholding at source now applies to fees paid by banks, insurance/reinsurance companies, and businesses with a turnover of MAD 50 million or more. The payee can credit the withheld amounts.
  • Sports companies’ tax benefits: Sports joint-stock companies are granted a five-year corporate tax exemption from the date of their first taxable operation.

VAT exemptions

There are plans to review the flat-rate income tax regime for both the public and private sectors. However, the budget includes various measures concerning VAT exemptions.

The 2026 Finance Bill grants numerous VAT exemptions, often conditional on specific use or type of goods. Exemptions subject to deduction rights apply to various activities, including construction works, cultural and sports promotion materials, and investment goods.

For investment goods, businesses investing in approved projects may benefit from an extension of the standard exemption delay of thirty-six (36) months, potentially receiving a supplementary delay of up to twenty-four (24) months.

Furthermore, certain imports are fully exempt from VAT, notably fertilisers and other agricultural materials.

Introduction of the petroleum product marking system

A petroleum product marking system, coordinated with the Ministry of Energy Transition, has been introduced to combat fraud in the hydrocarbon sector and secure vital tax revenues.

Domestic consumption taxes

The consumption tax, which already applies to beverages and tobacco, is expected to be extended to include products containing sugar or tobacco derivatives.

Carbon tax

To align national fiscal policy with global environmental mandates, the 2026 Finance Bill proposes introducing a new carbon tax.

Personal income tax and withholding tax changes

  • Rental income withholding: The 5% withholding tax on rental income now extends to payments made by corporate taxpayers and self-employed individuals under the professional income regime, not just public entities.
  • Capital gains and investment income: Tax on securities disposals not held in accounts must be paid within 30 days of each sale, with an annual summary required. Additionally, foreign-source investment income must be declared.

The measures will apply from 1 January 2026.