Corporate income tax calculation in Morocco: complete guide to the proportional scale
In brief: The 2022 Finance Law abolished the progressive IS scale: the calculation is now done on a proportional basis (a single rate applied to the entire profit). The 2023 Finance Law launched a four-year convergence (2023-2026) toward target rates of 20% and 35%. The minimum contribution (0.25% since 2023) applies in case of insufficient profit. Quarterly installments are paid every three months.
The calculation of corporate income tax (IS) in Morocco is an unavoidable obligation for every company established in the Kingdom. Since the reforms introduced by the 2022 and 2023 Finance Laws, the IS scale has undergone major transformations that directly impact the tax burden on businesses. At Upsilon Consulting, a chartered accounting firm in Casablanca, we guide our clients daily through the understanding and application of these tax rules.
Proportional or progressive: an essential distinction
It is essential to distinguish between two concepts that are often confused:
- Proportional system (in effect since the 2022 Finance Law) — The applicable rate depends on the bracket in which the total net taxable profit falls, and this single rate applies to the entire profit. This is the system currently in effect in Morocco.
- Progressive system (former regime, before 2022) — Each rate applied only to the portion of profit corresponding to its bracket (like the personal income tax). This system has no longer been used in Morocco since the 2022 Finance Law.
Example: For fiscal year 2025, a company with a net profit of MAD 2,000,000 will be subject to a rate of 22.75% on the entire profit — not 17.5% on the first 300,000, then 20% on the next bracket, etc.
IS scale applicable in 2025 (transitional rates)
For the fiscal year beginning on or after January 1, 2025, the IS rates are as follows (Art. 247-XXXVII-A of the CGI):
| Net taxable profit bracket | IS rate 2025 | Target rate 2026 |
|---|---|---|
| Up to MAD 300,000 | 17.5% | 20% |
| MAD 300,001 to MAD 1,000,000 | 20% | 20% |
| MAD 1,000,001 to MAD 99,999,999 | 22.75% | 20% |
| MAD 100,000,000 and above | 34% | 35% |
| Credit institutions, insurance | 39.25% | 40% |
Important notes:
- The 2025 rates are transitional rates (Art. 247-XXXVII-A). The definitive rates (Art. 19-I of the CGI) apply from the fiscal year beginning on January 1, 2026.
- The rate of 39.25% for credit institutions, Bank Al-Maghrib, the CDG, and insurance and reinsurance companies is the 2025 transitional rate; the target rate of 40% (Art. 19-I-C) only applies from 2026 onward.
Target rates for 2026 and beyond (Art. 19-I of the CGI)
The convergence planned by the reform aims for the following definitive rates:
- 20% for companies with net taxable profit below MAD 100 million (Art. 19-I-A)
- 35% for companies with net taxable profit equal to or above MAD 100 million (Art. 19-I-B) — excluding CFC and FIZ companies (see below)
- 40% for credit institutions, insurance and reinsurance companies (Art. 19-I-C)
Special regimes: CFC, FIZ, and Art. 6 companies
Casablanca Finance City (CFC) and Free Industrial Zones (FIZ)
CFC and FIZ companies benefit from a total exemption from IS for 5 years (Art. 6-I of the CGI). Beyond that, they are subject to the 20% rate (Art. 19-I-A), regardless of the profit amount — they are explicitly excluded from the 35% rate by Art. 19-I-B.
During the transitional period, the post-exemption rate converges from 15% to 20%:
| Fiscal year | CFC / FIZ (post-exemption) |
|---|---|
| 2023 | 16.25% |
| 2024 | 17.50% |
| 2025 | 18.75% |
| 2026+ | 20% (Art. 19-I-A) |
Art. 6 companies: exporters, offshoring, hotels, sports
Companies benefiting from exemptions under Art. 6 of the CGI (exporters, offshoring, hotels earning in foreign currencies, sports companies…) enjoy a total exemption for 5 years, then the 20% rate.
Warning — profit ≥ 100 million MAD: Unlike CFC/FIZ companies, these companies are not excluded from the 35% rate by Art. 19-I-B. If their net profit reaches or exceeds MAD 100 million, the following specific transitional rates apply (convergence from 20% to 35%, Art. 247-XXXVII-A):
| Fiscal year | Art. 6 — profit ≥ 100M | Art. 6 — profit 1M-100M | Art. 6 — profit < 1M |
|---|---|---|---|
| 2023 | 23.75% | 20% | 20% |
| 2024 | 27.50% | 20% | 20% |
| 2025 | 31.25% | 20% | 20% |
| 2026+ | 35% | 20% | 20% |
Exception: Companies that have signed an investment agreement of ≥ MAD 1.5 billion with the State (Art. 19-I-B-3) retain the 20% rate even if their profit exceeds MAD 100 million.
Cooperatives
Cooperatives with annual turnover (excluding taxes) below MAD 10 million benefit from an IS exemption. Above this threshold, they are subject to standard tax rules.
What IS rate applies to your company? Use our interactive IS rate calculator to instantly determine the applicable rate based on your activity, your profit, and the fiscal year.
Detailed IS calculation: step-by-step worked example
Let us take the example of a service-sector SARL based in Casablanca, with net taxable profit of MAD 1,500,000 for fiscal year 2025.
Step 1: Identify the applicable bracket. The profit of MAD 1,500,000 falls within the MAD 1,000,001 to MAD 99,999,999 bracket.
Step 2: Apply the proportional rate. Under the Moroccan proportional system, the rate of 22.75% applies to the entire profit.
Step 3: Calculate the IS. IS = 1,500,000 × 22.75% = MAD 341,250
Step 4: Verify the minimum contribution. If the turnover (excluding taxes) is MAD 8,000,000: MC = 8,000,000 × 0.25% = MAD 20,000. Since the calculated IS (MAD 341,250) exceeds the MC (MAD 20,000), it is the IS that is owed.
The minimum contribution: an unavoidable tax floor
The minimum contribution (cotisation minimale) represents a minimum amount of tax that every company must pay, regardless of its taxable result (Art. 144 of the CGI). This mechanism ensures a fiscal contribution even in cases of low or zero profit.
Minimum contribution rates (since the 2023 Finance Law)
- 0.25% of the MC base (operating income + financial income + subsidies and grants received) for standard activities (Art. 144-I-D)
- 0.15% for transactions involving petroleum products, gas, butter, oil, sugar, flour, water, electricity, and medicines
- Minimum amount: MAD 3,000
In cases of a deficit or insufficient profit, it is the MC that is paid. The excess paid as MC compared to the normally owed IS can be offset against the IS of the following three fiscal years.
History: The MC rate was 0.50% before 2022, then 0.40% in 2022, and 0.25% since the 2023 Finance Law.
Quarterly installments: paying IS throughout the year
The payment of corporate income tax is not made in a single lump sum. The Moroccan system requires the payment of four quarterly installments during the fiscal year.
Each installment represents 25% of the IS owed for the previous fiscal year (or of the minimum contribution if it is higher). Payment deadlines are set before the end of the 3rd, 6th, 9th, and 12th months following the opening date of the fiscal year.
Important transitional rule (Art. 247-XXXVII-B): For fiscal years beginning between January 1, 2023 and December 31, 2026, quarterly installments are calculated based on the tax amount at the current fiscal year’s rate (not the previous fiscal year’s rate). This provision aims to accelerate alignment with the new rates during the convergence period.
Example: A company whose fiscal year coincides with the calendar year and whose previous year IS was MAD 200,000 will have to pay 4 installments of MAD 50,000 each, due by end of March, end of June, end of September, and end of December.
Former progressive system: a look at historical calculation cases
Before the 2022 Finance Law that established the proportional scale (fiscal years beginning on or after January 1, 2022), the IS operated under a truly progressive scale. Here are the cases that arose at the time, which remain relevant for understanding the system’s evolution.
Case No. 1: Company under the capped progressive scale (service exporter, hotels earning in foreign currencies)
Assuming a net result of MAD 5,000,000:
IS = 300,000 × 10% + 4,700,000 × 17.5% = 852,500 dirhams
Case No. 2: Company taxed at the normal rate (no export, no incentive measures)
IS = 300,000 × 10% + (1,000,000 − 300,000) × 17.5% + (5,000,000 − 1,000,000) × 31% = 1,392,500 dirhams
Case No. 3: Mixed company (partly export, partly local turnover)
This is where the calculation became more complex. Let us take the example of a hotel with 90% of turnover in foreign currencies and 10% in dirhams, with a total result of MAD 5,000,000.
First opinion: Apply 17.5% to the entire result above the scale threshold, giving IS = 852,500 dirhams.
Second opinion (adopted by Upsilon Consulting): Calculate the tax on a pro rata basis.
IS = 90% × 852,500 + 10% × 1,392,500 = 906,500 dirhams
This pro rata calculation method was the one favored by the automatic calculator integrated into SIMPL-IS.
IS declaration and deadlines in Morocco
The annual IS declaration must be filed within three months of the closing of the fiscal year. For companies whose fiscal year coincides with the calendar year, the deadline is March 31 of the following year.
The declaration is filed through the SIMPL-IS platform of the General Tax Directorate (DGI). It must be accompanied by the balance sheet, income statement, and regulatory appendices.
Common mistakes in IS calculation
Here are the errors we frequently observe among our clients:
- Confusing proportional and progressive systems: since the 2022 Finance Law, the rate applies to the entire profit, not to successive brackets.
- Forgetting the minimum contribution: even in the case of a deficit, a minimum amount is due (at least MAD 3,000).
- Not anticipating quarterly installments: late payment triggers surcharges of 5% and late interest of 0.50% per month.
- Misidentifying the applicable bracket: an error of a few dirhams on the profit can push the company into a higher bracket with a significant impact.
- Ignoring special regimes: benefits related to exports, CFC status, or free industrial zones must be correctly applied.
- Applying 20% to Art. 6 companies with profit ≥ 100M: only CFC and FIZ companies are excluded from the 35% rate. Exporters, offshoring companies, and hotels with profit ≥ 100M are subject to the higher rates.
Impact of the reform on businesses
The IS reform has a differentiated impact depending on company size:
- Very small businesses (profit ≤ MAD 300,000): the 17.5% rate in 2025 will converge toward 20% in 2026. A controlled tax burden that encourages reinvestment.
- Mid-sized companies (profit between MAD 1M and MAD 100M): the main beneficiaries of the reform, with a rate of 22.75% in 2025 that will converge toward 20% — a significant decrease from the former 31% rate.
- Large corporations (profit ≥ MAD 100 million): the 34% rate in 2025 will converge toward 35% in 2026. The objective is to strengthen the contribution of large groups to the state budget.
Trust Upsilon Consulting to optimize your corporate income tax
Corporate income tax calculation in Morocco requires a deep understanding of tax legislation that is constantly evolving. Our chartered accounting firm in Casablanca supports you in determining your taxable result, calculating your optimal IS, and meeting all your filing obligations.
Simulate your IS in 2 clicks — Our free IS rate calculator instantly determines the applicable rate and minimum contribution based on your profit bracket and fiscal year.
Frequently Asked Questions
Is the IS scale in Morocco progressive or proportional?
Since the 2022 Finance Law, the IS scale in Morocco is proportional, not progressive. The applicable rate depends on the bracket in which the total net taxable profit falls, and this single rate applies to the entire profit — unlike the former progressive system (cumulative brackets) that was in effect before 2022.
What are the IS convergence rates planned for 2026?
The reform plans a convergence toward target rates in 2026 (Art. 19-I of the CGI): 20% for profits below MAD 100 million, 35% for profits ≥ MAD 100 million (excluding CFC and FIZ which remain at 20%), and 40% for credit and insurance institutions. Companies that have signed an investment agreement of ≥ MAD 1.5 billion retain the 20% rate.
Are CFC and FIZ companies subject to the 35% rate?
No. CFC and FIZ companies are explicitly excluded from the 35% rate by Art. 19-I-B of the CGI. After their 5-year exemption period, they are subject to the 20% rate (Art. 19-I-A), regardless of their profit amount. However, other companies benefiting from Art. 6 exemptions (exporters, offshoring, hotels, sports) with profit ≥ 100M are indeed subject to the 35% rate.
How can you avoid mistakes in IS calculation in Morocco?
The most frequent errors are confusing the progressive and proportional systems, forgetting the minimum contribution, and misclassifying into the wrong bracket. It is recommended to consult a chartered accountant to secure the calculation of taxable income and ensure the correct application of the scale in effect.
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