International Taxation of Interest in Morocco: Withholding Tax (WHT) and Tax Treaties 2026

Understanding International Interest Taxation in Morocco: WHT & Tax Treaties 2026

When interest is paid from Morocco to non-residents, specific tax rules apply. The Moroccan General Tax Code (CGI) mandates a 10% withholding tax (WHT) on such payments. However, certain exemptions exist, particularly for long-term foreign currency loans, and bilateral tax treaties can often reduce this rate. This comprehensive guide details the 2026 regime, country-specific treaty rates, the regulations of the Office des Changes (IGOC), and provides a practical example.

The Moroccan Legal Framework: Article 15 of the CGI 2026

Moroccan tax law differentiates between various interest taxation regimes based on the beneficiary's status and the nature of the transaction. For expert guidance on navigating these regulations, consider our Legal Advisory & Dispute Resolution services.

Withholding Tax on Interest Paid to Non-Residents

Article 15 of the CGI stipulates a 10% withholding tax on Moroccan-sourced interest paid, made available, or credited to non-resident individuals or legal entities. This WHT is considered a final tax for the non-resident, unless otherwise provided by a tax treaty.

This 10% rate applies to all fixed-income products, including interest on loans, bonds, cash vouchers, and term deposits.

General Regime for Residents

For beneficiaries residing in Morocco, the regime differs:

• A 20% WHT as an advance payment on interest received by legal entities subject to Corporate Income Tax (IS).
• A 30% WHT as income tax for resident individuals, with the option for global declaration.

Exemption for Long-Term Foreign Currency Loans

Article 6-I-C-3° of the CGI grants a total exemption from withholding tax on interest related to loans contracted in foreign currencies for a duration equal to or greater than 10 years. This measure aims to encourage the use of long-term international financing to support productive investment in Morocco. For new businesses looking to leverage such financing, our Startup Legal Status Creation service can assist in setting up the right structure.

The cumulative conditions to benefit from this exemption are:

• The loan must be denominated in foreign currency.
• The initial contract duration must be at least 10 years.
• The funds must be effectively repatriated to Morocco.
• The borrower must provide a certificate from the Office des Changes.

Treaty Rates: Country-by-Country Comparison

Bilateral tax treaties signed by Morocco can reduce the domestic WHT rate. Here are the main rates applicable to interest in 2026:

• France: 10% – 15% (10% for bank loans, 15% in other cases)
• Spain: 10% (Unique rate applicable to all types of interest)
• Belgium: 10% (Possible exemption for certain government loans)
• United Arab Emirates: 10% (Treaty recently entered into force)
• China: 10% (Applicable under beneficial owner condition)
• United Kingdom: 10% (Reduced rate upon justification of UK resident status)
• Canada: 15% (Standard rate, reduced to 10% for certain bank loans)

Important: Taxpayers should always compare the domestic rate (10%) with the treaty rate and apply the most favorable one. When the treaty rate is equal to or higher than the domestic rate, the 10% CGI rate applies.

IGOC Rules: Framework for Cross-Border Interest Flows

The General Instruction on Exchange Operations (IGOC) regulates the transfer of interest related to the following operations:

External Loans

Interest related to external loans contracted by Moroccan residents from non-resident lenders is freely transferable, subject to justification of the operation with the authorized intermediary bank. The transfer is made after applying the applicable WHT.

Loans from Non-Resident Shareholders

Shareholder current accounts funded by non-resident shareholders are subject to a specific regime. The related interest must comply with the maximum deductible interest rate fixed annually by an order of the Minister of Finance based on the average interest rate of 6-month Treasury bonds from the previous year (Art. 10-II-A-2° CGI).

The transfer of interest is subject to the production of a tax compliance certificate issued by the General Tax Directorate. For assistance with your company's financial reporting and compliance, consider our Accounting services.

Structured External Financing

For structured financing operations (syndication, international bonds, sukuk), the IGOC provides specific procedures for prior declaration to the Office des Changes. Interest is transferable in the currency of the loan, at the exchange rate on the day of transfer.

Practical Example: Interest Paid to a Spanish Bank

Let's consider a Moroccan company paying interest to a Spanish bank as part of a 5-year euro loan.

Transaction Data:

• Loan amount: 2,000,000 EUR
• Annual interest rate: 4.5%
• Gross annual interest: 90,000 EUR
• Duration: 5 years (not eligible for Art. 6-I-C-3° exemption)

Application of the Morocco-Spain Treaty Rate:

• Domestic rate (Art. 15 CGI): 10%
• Morocco-Spain treaty rate: 10%
• Applicable rate: 10%

Calculation:

• WHT = 90,000 EUR x 10% = 9,000 EUR
• Net amount transferred to the Spanish bank: 81,000 EUR

The Moroccan company must declare and pay the 9,000 EUR WHT to the DGI in the month following the interest payment. The Spanish bank can credit this withholding tax against its tax due in Spain under the double taxation agreement.

Conditions for Applying the Treaty Rate

To benefit from the reduced rate provided by a tax treaty, the non-resident must meet several conditions:

• Tax Residence Certificate: The beneficiary must provide a tax residence certificate issued by the tax administration of their country of residence for the year of interest payment.
• Beneficial Owner Status: The interest beneficiary must be the beneficial owner within the meaning of the treaty. Interposed structures without economic substance do not allow claiming the treaty rate.
• Prior Declaration: The Moroccan debtor company must file a declaration of remuneration paid to non-residents (form ADC040F) with the DGI.
• Claim Period: If the domestic rate was initially applied, the non-resident has a limitation period to claim a refund of the overpaid amount, subject to providing the required supporting documents.
• Limitation on Benefits (LOB) Clause: Some recent treaties include an LOB clause that restricts access to treaty benefits to residents meeting substance conditions.

Declaratory Obligations and Timeline

The Moroccan company paying interest to a non-resident must:

• Apply the WHT at the time of payment, provision, or crediting to the account.
• Pay the WHT to the Treasury in the month following the interest payment (Art. 160 CGI).
• Submit the annual declaration of remuneration paid to non-resident third parties before April 1st of the following year. Ensuring accurate and timely compliance with these obligations is crucial, and our Accounting services can provide invaluable support.

Understanding the nuances of international interest taxation is vital for businesses operating in Morocco. Navigating these rules correctly ensures compliance and optimizes financial flows.