Morocco's Tax Reforms (2020-2026): Complete Chronology and Business Impact

Between 2020 and 2026, Morocco underwent a major tax transformation, marked by seven successive Finance Laws (from NC 730 to NC 737). These reforms profoundly reshaped the national tax system, introducing proportional Corporate Income Tax (CIT), extending the Social Solidarity Contribution (SSC), harmonizing VAT, and making electronic invoicing mandatory. Each year brought its share of structural changes. This article provides a comprehensive chronology of the major developments to help you, executives and professionals, gain a clear and consolidated view of the tax transformations.

Why is a Chronology of Tax Reforms Essential?

Since 2020, the Kingdom has embarked on an ambitious overhaul of its taxation, in direct line with framework law n° 69-19 adopted in 2021. The 2019 National Tax Conferences had already set the objectives: broaden the tax base, simplify rates, ensure fiscal neutrality of restructuring operations, and digitalize declarative obligations.

Each Finance Law (LdF) is a crucial step in this transformation. Understanding their sequence is essential to anticipate future obligations and effectively optimize your company's tax strategy. Specialized support in accounting services and tax advisory can prove invaluable.

Tax Reforms in Morocco: The Detailed Chronology (2020-2026)

2020 — NC 730: The Start of CIT Convergence

The 2020 Finance Law initiated the progressive convergence of Corporate Income Tax (CIT) towards a proportional system, rationalizing the multiple rates previously applied.

• Minimum Contribution reduced to 0.50%: After being raised to 0.75% in 2019, the minimum contribution was lowered to 0.50% for profitable companies. This measure aimed to ease the pressure on profitable companies while maintaining CIT revenue.

2021 — NC 731: Consolidation and Restructuring Neutrality

The 2021 LdF continued the directions of the previous year without major upheavals, but with important clarifications.

• Reintroduction of the Social Solidarity Contribution (SSC): The SSC was reintroduced as a levy on the profits of companies exceeding a certain threshold. Initially presented as temporary, it would be renewed and extended over subsequent fiscal years.
• Tax neutrality of restructurings (Art. 247-XXVIII): Operations such as mergers, demergers, and partial asset contributions benefited from a strengthened tax neutrality regime. Capital gains realized during these operations could be neutralized under certain conditions, thereby encouraging companies to restructure their legal framework without immediate tax cost. For in-depth advice, do not hesitate to seek our legal and dispute resolution services.

2022 — NC 732: Abolition of Progressivity and Introduction of the Tax Group Concept

The year 2022 marked a significant simplification of CIT calculation.

• Abolition of the progressive CIT scale: The progressive CIT scale system was abandoned in favor of a single proportional rate, greatly simplifying tax calculation for companies.
• Introduction of the tax group concept: The legislator laid the groundwork for group taxation, allowing holdings and subsidiaries to consolidate certain aspects of their taxation. This mechanism opened the way for legitimate tax optimizations within groups.

2023 — NC 733: The Major and Structural Reform

The year 2023 represents the decisive turning point in Moroccan tax decade, concretizing the key recommendations of framework law n° 69-19.

• Proportional CIT: 20%, 35%, and 40%: The new proportional system was implemented with three target rates:
  • 20%: Common law rate for companies with a net fiscal profit of 100 million dirhams or less.
  • 35%: For companies whose profit exceeds 100 million dirhams.
  • 40%: Reserved for credit institutions, Bank Al-Maghrib, CDG, and insurance companies.
  A transition period extending from 2023 to 2026 was planned to gradually reach these rates.
• Minimum contribution lowered to 0.25%: For profitable companies, the minimum contribution was reduced to 0.25%, a strong signal to ease tax pressure and encourage accounting transparency.
• Preparation for VAT reform: Although initiated in 2024 (NC 735), 2023 laid the groundwork for VAT harmonization around two rates (10% and 20%), with the gradual abolition of 7% and 14% rates. The objective was to reduce VAT credit carry-forwards and broaden the tax base.
• Income Tax (IR) scale adjustment: The income tax (IR) scale was rearranged, with an increase in the exemption threshold and an adjustment of intermediate brackets to adapt to inflation.

2024 — NC 735: Dividends and Simplification for Founders

The 2024 LdF introduced important measures, particularly for profit distribution and company formation.

• Withholding tax on dividends: 13.75% transitional rate: A transitional rate of 13.75% was set for withholding tax on distributed dividends, part of a progressive convergence trajectory (12.5% in 2025, 11.25% in 2026, 10% from 2027 onwards).
• Exemption from registration fees for company formation: A key measure for entrepreneurs: company formation deeds are now exempt from registration fees. This provision significantly reduces the cost of establishment and enhances Morocco's attractiveness for entrepreneurship.

2025 — NC 736: Fiscal Digitalization and Simplified Social Management

The year 2025 marked a shift towards a more digital tax and social administration.

• Legal framework for electronic invoicing: The 2025 LdF established the legal framework for electronic invoicing in Morocco. The implementing texts defined technical standards, approved platforms, and the progressive deployment schedule, a crucial task for modern bookkeeping services.
• CNSS: Shift to monthly declaration: A major change for social management: the declaration to the National Social Security Fund (CNSS) shifted from a quarterly to a monthly rhythm starting in 2025. This adaptation requires a revision of payroll and declaration processes for companies and their accounting partners.

2026 — NC 737: Completion of Reforms and Consolidation

The 2026 Finance Law represents the culmination of the tax trajectory initiated in 2023, with the stabilization of many provisions.

• Target CIT rates achieved: The transitional rates are complete. The 20% rate fully applies to common law companies, and the 35% rate to large companies. The system is now stabilized, offering better fiscal visibility.
• Extension of the SSC (2026-2028): The Social Solidarity Contribution is extended for fiscal years 2026 to 2028. It remains due by companies whose net profit is equal to or exceeds 1 million dirhams, according to a progressive scale (from 1.5% to 5%).
• Mandatory electronic invoicing for large companies: Companies exceeding a certain turnover threshold are now required to issue and receive invoices in a standardized electronic format. SMEs will follow according to a progressive schedule, requiring an update of systems and accounting skills.

Morocco's tax reforms from 2020 to 2026 have profoundly transformed the tax landscape. They aimed to modernize, simplify, and balance the system to foster growth and investment. To effectively navigate these changes and ensure your company's compliance, the expertise of a firm like iHub is essential. Our team of experts is available to provide legal and tax advice tailored to your specific needs.