Moroccan Corporate Tax (IS) 2026: Definitive Rates, Calculation & Fiscal Regime | iHub

Morocco's Definitive Corporate Tax (IS) Rates Applicable from 2026

As of January 1, 2026, the Corporate Tax (IS) in Morocco is fully governed by the definitive rates resulting from the reform initiated by Finance Law 2023 (No. 50-22). This progressive convergence, completed over four fiscal years, establishes simplified proportional rates for business taxation.

• 20 %: for companies with a net taxable profit of less than 100 million Moroccan Dirhams (MAD).
• 35 %: for large companies with a net taxable profit equal to or greater than 100 million Moroccan Dirhams (MAD).
• 40 %: applicable to credit institutions, Bank Al-Maghrib, CDG, and insurance and reinsurance companies.
• 20 % (regardless of profit): for CFC companies and those established in industrial acceleration zones (ZAI).

It is crucial to note that these rates are proportional: a single rate applies to the entirety of the net taxable profit, marking a fundamental distinction from the former progressive scale.

Exclusion from the 35% Rate and Return to the 20% Rate

Certain companies incorporated from January 1, 2023, may be excluded from the 35% rate if they commit, through an agreement with the State, to invest at least 1.5 billion Dirhams over five years in tangible fixed assets held for at least 10 years (excluding public establishments and enterprises). Furthermore, a company that has applied the 35% rate will only revert to the 20% rate if its net taxable profit remains below 100 million Dirhams for three consecutive fiscal years (Article 19-I of the CGI).

Calculating Corporate Tax (IS) in 2026: Methodology and Examples

The calculation of Corporate Tax (IS) involves four key steps:

1. Determining Taxable Profit

Taxable profit is derived by adjusting accounting profit for fiscal reintegrations (non-deductible expenses) and tax deductions (exempt income).

Taxable Profit = Accounting Profit + Tax Reintegrations − Tax Deductions

2. Applying the Proportional Rate

The corresponding IS rate is applied to the entire net taxable profit:

• Profit < 100 M MAD → 20 %
• Profit ≥ 100 M MAD → 35 %
• Credit institution / Insurance → 40 %

Example: A company generates a net taxable profit of 5,000,000 MAD in 2026. The applicable rate is 20% (as < 100 M MAD). The IS due will be: 5,000,000 MAD × 20% = 1,000,000 MAD.

3. Calculating the Minimum Contribution (CM)

The minimum contribution represents a floor for taxation, even in the event of a deficit. Its rate is 0.25% (minimum 3,000 MAD) applied to a base including turnover and other operating and financial income.

CM = CM Base × 0.25 % (minimum 3,000 MAD)

4. Determining the IS Due

The IS due corresponds to the higher amount between the IS calculated at the proportional rate and the minimum contribution.

IS Due = MAX (IS calculated at proportional rate, Minimum Contribution)

Deficits can be carried forward over the next four fiscal years, with the portion corresponding to regularly accounted depreciation being carried forward indefinitely. For accurate management, proper accounting services are essential.

Beware of the Threshold Effect

A change in net taxable profit from 99 M MAD to 101 M MAD results in a significant increase in IS due, as the 35% rate applies to the entire profit. Careful tax planning is crucial for businesses near this threshold, especially those subject to transfer pricing rules.

Finance Law 2024 introduced an exemption: if the 100 M MAD threshold is crossed solely due to non-current income from the disposal of fixed assets, the 35% rate applies only for that fiscal year. The 20% rate can revert in the following year if the profit falls back below the threshold, without waiting for three consecutive years. This requires precise documentation of the origin of the excess.

The Minimum Contribution (CM): Details and Evolution

The CM, the tax floor, is set at 0.25% with a minimum of 3,000 MAD since 2023. Companies are exempt for the first 36 months of their activity (up to 60 months after incorporation).

Historically, the CM rate has evolved: 0.50% (before 2019), 0.75% (2019), 0.50% (2020-2021), 0.40% (2022), and finally 0.25% (since 2023). Since Finance Law 2016, any CM surplus over IS is definitively acquired by the Treasury and is neither carried forward, offset, nor refundable.

History of Corporate Tax (IS) Rate Evolution in Morocco (2019-2026)

Morocco's corporate taxation has undergone profound changes. Here are the key stages:

• Before 2020 – Progressive Scale: IS was calculated by tranches (10%, 17.5%, 31%), similar in logic to personal income tax.
• FL 2020 – Start of Convergence: Introduction of a reduced rate for industrial activities and adjustments to special rates (exporters, offshoring).
• FL 2022 – Abolition of Progressivity: Abandonment of the progressive scale in favor of proportional rates, simplifying calculation but creating threshold effects. The minimum contribution decreased to 0.40%.
• FL 2023 – The Global Reform: Implementation of a progressive convergence over 4 fiscal years (2023-2026) towards the definitive target rates. The minimum contribution was reduced to 0.25%.
• FL 2024 – Neutralization of Capital Gains on Disposals: Exemption from the three-year rule for crossing the 100 M MAD threshold due to capital gains on the disposal of fixed assets.
• FL 2025 – Rate Stability: No changes to IS rates, the convergence continues.
• FL 2026 – Target Rates Achieved: The definitive rates of 20%, 35%, and 40% are fully applicable. Adjustments are introduced for microfinance institutions and the exemption from withholding tax on maritime chartering.

Special Cases and Regimes for IS

Certain categories of companies benefit from derogatory regimes:

• Exporting Companies: Taxation at a rate of 20% on export turnover, with no five-year exemption (exhausted since 2024).
• CFC (Casablanca Finance City) Companies: Total exemption for 5 years, then a 20% rate regardless of profit.
• Industrial Acceleration Zones (ZAI): Total exemption for 5 years, then a 20% rate regardless of profit.
• Hotel Companies: Total exemption for 5 years on the portion of turnover generated in duly repatriated foreign currency, then standard rate (20% or 35%).
• Agricultural Holdings: Permanent exemption for holdings with annual turnover below 5,000,000 MAD.
• Cooperatives: Permanent exemption for cooperatives with annual turnover (excluding VAT) below 10,000,000 MAD.
• Offshoring Companies: Total exemption for the first 5 fiscal years following the start of operations, then standard rate (20% or 35%).

The Social Solidarity Contribution (CSS)

In addition to Corporate Tax, companies with a net taxable profit equal to or greater than 1,000,000 MAD are subject to the Social Solidarity Contribution (CSS), extended by FL 2026. The CSS is calculated on the net taxable profit and is added to the IS (non-deductible).

• From one million to less than 5 million MAD: 1.5 %
• From 5 million to less than 10 million MAD: 2.5 %
• From 10 million to less than 40 million MAD: 3.5 %
• From 40 million MAD and more: 5 %

The CSS is also proportional, not progressive. For example, a company with 8,000,000 MAD in profit will pay a CSS of 2.5%, or 200,000 MAD, in addition to the IS.

FAQ – Frequently Asked Questions About Moroccan Corporate Tax (IS)

What are the IS rates applicable in 2026?

The definitive rates are: 20 % (profit < 100 M MAD), 35 % (profit ≥ 100 M MAD) and 40 % (credit institutions, insurance, CDG, Bank Al-Maghrib). CFC and ZAI companies benefit from a 20 % rate regardless of their profit.

Is IS progressive or proportional?

IS is proportional since Finance Law 2022. A single rate applies to the entirety of the net taxable profit, unlike the former progressive scale. Personal Income Tax (IR) remains progressive.

What is the minimum contribution rate?

The minimum contribution rate is 0.25 % of the base calculated on operating income, financial income, and subsidies, with a minimum of 3,000 MAD. Companies are exempt for the first 36 months of activity.

When should IS be paid?

IS is paid in the form of four provisional installments, each equal to 25% of the tax due for the last closed fiscal year (the higher of IS and minimum contribution). For fiscal years opened from January 1, 2023, to December 31, 2026, installments are calculated according to the rates of the current fiscal year. Deadlines are before the end of the 3rd, 6th, 9th, and 12th months of the fiscal year. Final adjustment (balance or surplus) occurs when filing the annual declaration via the SIMPL portal, no later than March 31 of the following fiscal year.

What happens if my profit exceeds 100 M MAD?

The 35 % rate applies to the entirety of the net taxable profit. However, if the excess is due solely to non-current income from the disposal of fixed assets, the 35% rate applies only for that fiscal year. The 20% rate becomes applicable from the following year if the net profit falls back below the threshold, without waiting for three consecutive years. An excess due to normal operations or other non-current income maintains the three-year rule. In case of a tax audit, the administration may verify the accuracy of these amounts.

My profit falls below 100 M MAD: Can I revert to the 20% rate?

Yes, but if the initial crossing was not related to capital gains on asset disposals, you must wait for your net taxable profit to remain below 100 million Dirhams for three consecutive fiscal years to once again benefit from the 20 % rate (Article 19-I of the CGI).

Understanding these mechanisms is fundamental for any company operating in Morocco. For personalized support in managing your business taxation, do not hesitate to contact iHub.