In brief: Financial reporting in Morocco is governed by accounting law 9-88 and the CGNC. All commercial companies must prepare five mandatory financial statements (balance sheet, income statement, ESG, financing table, and ETIC) and file them annually with the court registry. Companies exceeding MAD 50 million turnover require a statutory audit.
Accounting and financial reporting in Morocco
In Morocco, accounting law 9-88 imposes a principle of transparency on all traders. Indeed, commercial companies must:
- Prepare financial statements: develop accounting information in the form of summary statements in compliance with CGNC standards ;
- Annual filing: file summary statements with the court registry each year.
The financial statements required by accounting law can be either according to the normal model or according to the simplified model. The normal model is obligatory for companies with a turnover of more than 10 million dirhams.
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Definition of financial reporting in Morocco
Financial reporting is an obligation imposed on all companies in Morocco. Indeed, this accounting information consists of collecting financial data (purchases, sales, cash flows, etc.) and recording them in compliance with accounting principles .
Companies must make their accounts public by annual filing with the court registry. Each interested party can recover their accounts (employees, suppliers, customers, banks, etc.).
When companies are in the form of a limited company , or when their turnover exceeds 50 million dirhams, they must submit certified accounts. The certification is made by an auditor . The auditor’s report is also filed with the court registry at the same time as the accounts.
The obligation to publish accounting information should not be confused with the obligation to prepare tax accounts.
The accounts that companies must make public correspond to what is called: The accounting package. This bundle includes:
- Balance sheet: a snapshot of assets and liabilities at a given date
- Income statement (CPC): summarizes revenues and expenses for the period
- Statement of management balances (ESG): breaks down intermediate balances and self-financing capacity
- Financing table: analyzes resource and application flows
- ETIC: the supplementary information statement with notes essential for interpretation
Why the financial reporting obligation?
In the course of their life, companies establish relationships with several stakeholders. These stakeholders are, for example: The tax authorities, suppliers, customers, banks, investors, etc.
All these stakeholders are interested in having information on the financial health of the company.
Accounting information is particularly useful for its partners to make decisions (grant credit, collect taxes, etc.).
We call its partners: the users of accounting information.
So for investors, accounting information allows them to make decisions: increase capital, distribute dividends. For suppliers: grant supplier credit, request guarantees, etc.
The law, therefore, sanctions any irregularity in the keeping of accounting information which must scrupulously respect accounting principles.
Managers are liable for the accounts they file with the court registry. They have the obligation to ensure that these accounts are regular, sincere and reflect in all their significant aspects a faithful image of the company’s activity. One of the best practices is to hire professionals to carry out independent audits even in the absence of a legal obligation.
This responsibility is increased in the case of companies making public offerings. Indeed, as they benefit from public funds, they are subject to stricter control (two auditors, control by the AMMC, etc.).
Accounting principles in Morocco: What you need to know
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In the complex and regulated field of accounting, financial reporting in Morocco presents its own specificities, governed by rigorous standards and laws. This article aims to shed light on key aspects of this regulation, with a focus on IFRS and Moroccan accounting standards, which form the basis of accounting in the country. These standards, essential for public companies and financial institutions, define the rules of transparency and presentation of financial statements. Understanding these standards is crucial for any business operating in Morocco, highlighting the importance of accountants in the country’s economic ecosystem.
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Financial reporting in Morocco – Regulations
The Financial reporting landscape in Morocco is governed by specific standards and regulations aimed at ensuring the transparency and reliability of company financial information. These standards are mainly defined by the General Code of Accounting Standardization (CGNC) and apply to all economic actors in the country, including traders, liberal professions, craftsmen, associations, and various forms of companies.
The CGNC establishes seven fundamental accounting principles:
- Principle of continuity of operation : The accounts must be established with the perspective of a continuation of the company’s activity.
- Principle of consistency of methods : The same rules of evaluation and presentation must be applied from one exercise to another.
- Historical cost principle : The initial value of an accounting element remains unchanged despite market fluctuations.
- Principle of specialization of financial years : Expenses and income must be allocated to the accounting year to which they relate.
- Principle of prudence : In the event of uncertainties affecting costs or income, these must be taken into account in the financial year concerned.
- Principle of clarity in accounting : Information must be clearly categorized, correctly named and without compensation between them.
- Materiality : All items of material importance must be disclosed in the financial statements.
Accounting books
Companies in Morocco are required to keep mandatory accounting books, such as the accounting procedure manual, the journal book , the general ledger and the trial balance, in addition to producing various financial statements such as the balance sheet, the income statement, and the cash flow statement.
Accounting , beyond its basic function of recording transactions, plays a crucial role in the management of a business and provides essential financial information to various stakeholders, such as banks, shareholders, employees and tax bodies. It thus provides a clear vision of the company’s financial situation, facilitating decision-making and risk management.
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Financial reporting in Morocco – Role of the Certified Public Accountants
CPAs in Morocco play an essential role in economic development and business growth. They provide a range of specialist services, from accounting and tax to financial advice. These professionals are regulated by the Order of Chartered Accountants (OEC) of Morocco, which imposes strict professional standards and continuing education to maintain their status.
To become a chartered accountant in Morocco, candidates must follow a specific training course. After obtaining a degree in accounting or finance, they must continue with a diploma in accounting and financial studies ( cycle of accounting expertise ), followed by a diploma in accounting expertise (DEC). The DEC is a Master’s level diploma and marks the completion of the training course to become a chartered accountant.
Roles of the certified public accountant
Moroccan accountants offer various services, including:
- Accounting : Maintaining accounting records, preparing financial statements, and complying with local and international accounting standards.
- Taxation : Helping businesses and individuals comply with tax laws, prepare and file tax returns, and minimize the tax burden.
- Audit : Carrying out financial audits to verify the accuracy of financial statements and detect fraud.
- Financial Advice : Providing advice on cash flow management, financial planning, and debt management.
In terms of regulation, the OEC sets ethical standards for public accountants, requiring confidentiality and avoidance of conflicts of interest. In addition, the chartered accountant is the only professional authorized to certify the regularity and sincerity of the balance sheets and income statements, and to carry out the mission of statutory auditor. This exclusive competence is essential to guarantee the reliability of companies’ accounting and financial data.
The Chartered Accountant diploma in Morocco requires several years of study after the baccalaureate, including a three-year professional internship. This comprehensive training ensures that accountants have the skills and knowledge to effectively advise businesses on various financial, legal and tax matters.
For more information on the role and training of accountants in Morocco, you can visit the Training and OEC Maroc websites .
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Business taxation in Morocco
Corporate taxation in Morocco is a complex area which includes several key elements to understand for effective tax management.
- Corporate Tax (IS) : Corporate tax is a direct tax applied to the profits of Moroccan companies. It concerns all companies, whether national or foreign, operating in Morocco. Foreign companies are taxed on their profits made in Morocco. The corporate tax rate is proportional, with a standard rate of 20% for profits below 100 million dirhams, and a rate of 35% for profits above this threshold. Credit institutions and similar organizations are subject to a rate of 40%.
- Tax exemptions and incentives : Certain economic activities benefit from exemptions or reduced tax rates. For example, hotel companies are completely exempt from corporate tax on profits relating to foreign currency turnover for the first five years, then taxed at 20% thereafter. Morocco also offers tax incentives to encourage local and foreign investments.
- Taxation of capital gains : Capital gains are taxed at the same rate as corporate tax. Non-resident companies benefit from an exemption on capital gains from the sale of shares on the Casablanca Stock Exchange, with the exception of shares of real estate entities.
- Tax deductions and credits : Businesses can deduct various expenses related to their business activities. Charitable donations are also deductible under certain conditions. Tax losses can be carried forward for four years, and the depreciation portion of the losses can be carried forward indefinitely.
- Other corporate taxes : There are various other taxes applicable to corporations, such as registration fees, property tax, municipal tax, and payroll tax. These taxes vary depending on the circumstances and activities of the companies.
For optimal tax management, it is recommended to work with a qualified accountant or tax advisor. They can help businesses navigate the complex tax landscape, ensure compliance and optimize the tax situation.
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Accounting information in Morocco – How to become a chartered accountant
To become a chartered accountant in Morocco, it is necessary to obtain the National Diploma of Chartered Accountant (DNEC), established by Decree No. 2.89.519 of 23 hija 1410 (July 16, 1990). This diploma is issued after meeting training and internship conditions. The training is organized exclusively by the ISCAE Group and includes a three-year cycle accompanied by a professional internship of the same duration. The admission process involves a very selective entrance exam with written tests in accounting, law, management, and expression technique. After the training, the writing of a final dissertation is required. Accountants have an expanded role beyond accounting, offering consulting services in various areas to businesses. For more information, you can visit the Upsilon Consulting website here .
Upsilon Consulting plays a crucial role in guaranteeing the quality of accounting information in Morocco. As an accounting firm, it contributes to the production of accounting information in a reliable manner and in compliance with current standards. Upsilon Consulting also provides auditing services, where it evaluates and verifies the accuracy of companies’ financial data, ensuring its reliability and transparency. This role is essential for the proper functioning and credibility of companies in the Moroccan economic landscape. For more details on our services, visit the Upsilon Consulting homepage .
Frequently Asked Questions
What financial statements are mandatory in Morocco?
Moroccan companies must prepare five mandatory financial statements: the balance sheet (bilan), the income statement (CPC), the management summary statement (ESG), the financing table (tableau de financement), and the additional information statement (ETIC). These documents form the annual financial reporting package required by the General Code of Accounting Standards.
Who is required to file financial reports in Morocco?
All companies subject to Corporate Tax or Income Tax under the professional income regime must file annual financial reports with the tax administration. This includes LLCs, PLCs, and other legal entities, as well as individual entrepreneurs exceeding certain turnover thresholds. Filing deadlines are typically within three months of the fiscal year-end.
What are the penalties for late financial reporting in Morocco?
Companies that fail to file their financial statements on time face a surcharge of 15% of the tax due (or a minimum of 500 MAD), along with a late payment penalty of 0.50% per month of delay and a first-month surcharge of 5%, increasing to 10% after the second month. Additionally, the tax administration may reject the company’s accounts and proceed with a unilateral reassessment of taxable income, which can result in significantly higher tax liabilities. Repeated non-compliance may also trigger a full tax audit, further exposing the company to additional adjustments and penalties.
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