In brief: Foreign companies operating in Morocco are subject to corporate tax on profits generated through a permanent establishment (Art. 2-I and Art. 4 of the CGI). Moroccan-source income paid to non-residents without a PE is subject to a 15% withholding tax (Art. 15). A flat rate of 8% applies to construction and assembly contracts (Art. 19-III). Tax treaties may reduce or eliminate these levies.
Scope of Corporate Tax for Foreign Companies
Territorial Principle (Art. 2-I)
Corporate tax applies to companies — whether Moroccan or foreign — on profits earned in Morocco. The determining factor is territorial connection, not the company’s nationality.
Three scenarios arise:
- Permanent establishment in Morocco: the company is taxed under standard corporate tax rules on profits attributable to that establishment.
- No PE, but Moroccan-source income: gross payments are subject to withholding tax.
- No activity or Moroccan-source income: no taxation in Morocco.
Definition of Permanent Establishment (Art. 4)
Art. 4 of the CGI defines a permanent establishment as a fixed place of business through which a non-resident company carries out all or part of its activity in Morocco. The following constitute a PE:
- A place of effective management
- A branch
- An office, factory or workshop
- A construction or assembly site lasting more than 6 months
- A dependent agent habitually acting on behalf of the company
Not considered a PE: facilities used solely for storage, display, delivery of goods, or purchasing on behalf of the company (aligned with OECD model criteria).
Taxation of Permanent Establishment Profits
Determining Taxable Income
The PE is treated as a separate entity. Its taxable income is determined under standard rules:
- Taxable revenue attributable to the activity carried out in Morocco
- Deductible expenses incurred for the purposes of that activity
- Allocable share of head office expenses (capped in practice at a reasonable percentage of Moroccan turnover)
The applicable CT rate is the standard rate: 20% (net profit < 100 million MAD) or 35% (net profit ≥ 100 million MAD).
Profit Remittance to Head Office
Net profits transferred by the PE to its foreign head office are treated as dividends and subject to a withholding tax of 11.25% in 2026 (Art. 247-XXXVII trajectory). This levy is in addition to the standard corporate tax paid by the PE.
Withholding Tax on Gross Payments to Non-Residents (Art. 15)
Payments Subject to WHT
Non-resident companies receiving Moroccan-source income without a PE are subject to WHT at a general rate of 15% on the following gross amounts:
- Royalties (licences, patents, trademarks, know-how)
- Technical assistance fees
- Service fees for services used in Morocco
- Loan interest
- Commissions and professional fees
Specific WHT Rates
| Type of income | 2026 WHT rate |
|---|---|
| Gross payments (general rate) | 15% |
| Dividends | 11.25% |
| Loan interest (certain cases) | 10% |
| Teaching/training fees | 15% |
The WHT is withheld by the Moroccan paying entity and remitted to the tax administration within the month following payment.
8% Flat Rate for Construction Contracts (Art. 19-III)
Non-resident companies awarded construction, building or assembly contracts in Morocco may opt for a flat-rate taxation at 8% of the total contract amount (excluding VAT), instead of standard corporate tax.
Conditions for the Option
- The option is irrevocable for the duration of the contract
- It must be exercised upon filing the declaration of existence (Art. 148)
- The 8% rate covers both corporate tax and WHT — no additional withholding is due
This option is advantageous when the actual net margin is below 40% (since 8% of turnover is equivalent to approximately 40% x 20%).
Tax Treaties and Elimination of Double Taxation
Morocco has a network of more than 60 bilateral tax treaties (including those with France, Spain, the UAE, the United States, the United Kingdom, etc.). These treaties may:
- Exempt PE profits below certain thresholds
- Reduce WHT rates (for example, the Morocco-France treaty limits royalty WHT to 10%)
- Eliminate double taxation through a tax credit or exemption mechanism
Applying a treaty requires the foreign company to provide a certificate of tax residence issued by the tax authority of its home country.
Filing Obligations for Foreign Companies
Declaration of Existence (Art. 148)
Any foreign company starting business in Morocco must file a declaration of existence within 30 days of the installation date with the tax office of the PE’s jurisdiction.
Tax Representative
Non-resident companies without a PE that carry out taxable operations in Morocco must appoint a tax representative domiciled in Morocco (Art. 164 bis). The representative is jointly liable for taxes due. For further details, see our guide on tax representation in Morocco.
Periodic Filings
The PE is subject to the same filing obligations as a Moroccan company: corporate tax return, financial statements, provisional instalments and declaration of third-party remuneration.
For secure compliance with your tax obligations in Morocco, our tax advisory team assists you in structuring your presence and managing your filings.
Frequently Asked Questions
Must a French company pay corporate tax in Morocco if it sends employees for a 4-month construction project?
No, in principle. The Morocco-France treaty provides that a construction site constitutes a PE only after 6 months (or 183 days). A 4-month site does not trigger corporate tax in Morocco, unless other criteria are met (dependent agent, permanent office).
Is the 15% WHT final or creditable?
The WHT is final for non-residents without a PE in Morocco — it constitutes the definitive tax. However, if the company has a PE, it may credit the WHT suffered against the corporate tax due by that establishment.
How can WHT be recovered when a treaty applies?
If the treaty provides for a reduced rate, the foreign company must supply a certificate of tax residence to its Moroccan counterparty before payment. If WHT was withheld at the full rate, a refund request may be filed with the DGI within 4 years.
Legal references:
- General Tax Code 2026 (PDF) — Art. 2-I (territoriality), Art. 4 (PE), Art. 15 (WHT), Art. 19-III (8% flat rate)
- OECD Model Tax Convention — Art. 5 (PE definition)
- SIMPL Platform — Online filing and payment
READ ALSO:
- Corporate Tax in Morocco 2026: Proportional Rates, Calculation & Filing
- Holding Company Tax Regime in Morocco
- Morocco-France Tax Treaty
- Tax Representation in Morocco
- Corporate Tax Filing in Morocco: SIMPL, Financial Statements & Deadlines
- Corporate Tax Exemptions in Morocco
Is your company expanding to Morocco? Contact Upsilon Consulting, a chartered accounting firm in Casablanca, for end-to-end support in structuring your tax affairs.
