Tax The Morocco tax system is modelled after the French
system and has quite a few complexities. We always
consult and work closely with our international tax
advisers prior to offering our investors tax reduction
strategies. The following information is a very basic
guide to the Morocco tax implications for UK investors:
PERSONAL INCOME TAX ON RENTAL INCOME (IGR)
UK investors utilizing a buy-let strategy will be responsible
to pay tax on this income. In Tangier 60% of this
income is taxable at 22% (other parts of Morocco
are taxed at 44%). The city of Tangier has a 50%
reduction on rental income tax adding yet one more
advantage to invest in Tangier.
There is also a three-year exoneration for the first
three years the property is owned.
PROPERTY TAX (Taxe Urbaine) (Personal vacation home
option) Property taxes are paid annually. The first five
years owners have full exoneration (Property agencies
are NOT included). After 5 years the tax is based
on the property's annual rental value.
There is a 75% discount if the home is your permanent
or vacation home residence.
PROPERTY RENTAL TAX (Taxe Urbaine) (Investor option) Investors pay 13.50% on the rental value of the property.
CAPITAL GAINS TAX (Taxe sur les Profits Immobiliers
- TPI) Capital gains tax is 20% of profit with a minimum of
3% of the sale price. TPI is based on the sale price
less the purchase price.
EXONERATION FROM CAPITAL GAINS The property is sold after owning it for more than
ten years.
The property is owned for more than 5 years but less
than 10 years. In this case the TPI tax 10% of any
capital gain over 1 million Dirhams.
INHERITANCE TAX This tax is 0% for family members.
Expert advice should always be obtained prior to implementing
any inheritance
tax planning strategies. The most important piece
of advice we can offer on this subject is – make
a Moroccan will!
UK-MOROCCO TREATY There is a double tax treaty between the UK and Morocco
that ensures investors do not suffer Capital Gains
tax in both countries.
