In brief: Corporate Tax in Morocco is paid through four quarterly provisional installments, each equal to 25% of the tax due for the previous fiscal year. Filed electronically on the SIMPL-IS platform of the General Tax Directorate (DGI), late payment triggers automatic penalties of 10% plus 0.50% per month. Learn more about Corporate Tax calculation.
In Morocco, Corporate Tax is paid through provisional installments. Each provisional installment represents 25% of the Corporate Tax amount due for the previous fiscal year, known as the reference year. This mechanism, established by the General Tax Code (CGI), enables the State to collect tax revenue on a regular basis throughout the year, while spreading the fiscal burden for companies.
Understanding how corporate tax provisional installments work is critical for any company subject to Corporate Tax in Morocco. Miscalculating installments or missing payment deadlines can lead to significant penalties. Here is a comprehensive guide on the subject.
Payment Deadlines for Corporate Tax Provisional Installments
Companies must pay four provisional installments during the fiscal year, at the end of each quarter. The deadlines are set at the end of the 3rd, 6th, 9th, and 12th month following the start of the fiscal year.
For a company with a fiscal year ending on December 31 (the standard case), the provisional installments are due as follows:
- First installment: before March 31
- Second installment: before June 30
- Third installment: before September 30
- Fourth installment: before December 31
For companies with an offset fiscal year (for example, closing on June 30), the deadlines shift accordingly: end of the 3rd month (September 30), end of the 6th month (December 31), end of the 9th month (March 31), and end of the 12th month (June 30).
Corporate Tax provisional installments are filed electronically on the SIMPL IS platform of the General Directorate of Taxes (DGI) and are subject to mandatory electronic payment.
Legal Framework: Article 170 of the General Tax Code
According to Article 170 of the General Tax Code, “Corporate Tax gives rise, for the current fiscal year, to the payment by the company of four (4) provisional installments, each equal to 25% of the tax due for the last closed fiscal year, known as the reference year.”
This payment must be made through mandatory electronic filing. Article 170 constitutes the primary legal basis governing provisional installments in Morocco and defines the calculation methods, deadlines, and conditions for exemption.
Calculating the Provisional Installments
Each provisional installment is calculated based on the tax due for the reference fiscal year:
Amount of each installment = Tax from the reference year x 25%
The reference tax includes the Corporate Tax actually due, or the minimum contribution (cotisation minimale) if it is higher than the calculated Corporate Tax. Provisional installments are therefore always calculated on the higher amount between the Corporate Tax and the minimum contribution.
Reference Year
The reference year corresponds to the last closed fiscal year. For example, the provisional installments for the fiscal year starting January 1, 2022, are calculated based on the tax from the fiscal year ending December 31, 2021. The reference year is therefore 2021.
Furthermore, when a reference year is shorter than 12 months, the company must prorate the tax amount to a 12-month period before calculating the provisional installments.
Example: Change of fiscal year
Duration of the reference year = 9 months
Tax amount for the reference year = 90,000 MAD
Installment amount for the following year = (90,000 / 9 x 12) x 25% = 30,000 MAD
Provisional Installments When the Tax Due Is the Minimum Contribution
When the tax paid by the company during the reference year is the minimum contribution, the provisional installments for the following year must be calculated based on that minimum contribution amount.
For companies exempt during the reference year, the provisional installments must be paid based on the tax amount that would have been due in the absence of any exemption.
Practical Calculation Example for Provisional Installments
Consider the case of an LLC (SARL) whose reference year (2024) shows the following figures:
- Revenue: 5,000,000 MAD
- Net taxable income: 600,000 MAD
- Corporate Tax calculated (rate of 20%): 120,000 MAD
- Minimum contribution (0.50% of revenue): 25,000 MAD
Since the Corporate Tax (120,000 MAD) exceeds the minimum contribution (25,000 MAD), the reference tax is 120,000 MAD.
Calculation of each provisional installment for 2025:
Amount of each installment = 120,000 x 25% = 30,000 MAD
The four provisional installments will therefore be 30,000 MAD each, for a total of 120,000 MAD paid during fiscal year 2025.
Year-End Regularization
At the close of the fiscal year, the company must regularize its tax position. Two scenarios arise:
- Final Corporate Tax exceeds installments paid: the company must pay the balance (remainder) no later than the deadline for filing the tax return, i.e., before March 31 of the following year for companies closing on December 31.
- Final Corporate Tax is less than installments paid: the excess constitutes a tax credit that can be applied against provisional installments for subsequent fiscal years. This credit is applied automatically without a prior request.
Exemptions for New Companies
Newly established companies are exempt from the minimum contribution during the first 36 months following the date their business activities begin. However, this exemption applies only to the minimum contribution. If the calculated Corporate Tax exceeds the minimum contribution, it remains due as normal.
During this period, if the company has no taxable profit (or if the Corporate Tax is zero), it has no provisional installments to pay. However, as soon as Corporate Tax becomes due, provisional installments must be calculated and paid according to the standard rules.
Exemption from Provisional Installment Payments
Under the provisions of Article 170-IV of the General Tax Code, a company may request exemption from paying provisional installments under certain conditions:
“A company that considers that the amount of one or more installments paid for a fiscal year is equal to or greater than the tax it will ultimately owe” (…):
- may refrain from making further provisional installment payments;
- by submitting to the tax inspector at the location of its registered office or principal establishment in Morocco, fifteen (15) days before the due date of the next payment;
- a dated and signed declaration, in accordance with the standard form established by the administration.
This declaration is made through electronic filing on the SIMPL IS platform. Important note: if the final Corporate Tax proves to be higher than the installments paid, the company will have to pay the balance plus late payment penalties.
Penalties for Late Payment of Provisional Installments
Failure to meet the payment deadlines for corporate tax provisional installments triggers penalties as provided by the General Tax Code:
- 10% surcharge on the amount of the provisional installment not paid on time
- 5% penalty for the first month of delay
- 0.50% penalty per additional month or fraction of a month of delay
These penalties are applied automatically, without prior formal notice. It is therefore crucial to strictly observe all deadlines to avoid additional financial charges that can accumulate rapidly.
Accounting Treatment of Provisional Installments
From an accounting perspective, corporate tax provisional installments are recorded as a debit to account 3453 - Advance payments on income tax. This account is settled at year-end when the final Corporate Tax is recorded.
The accounting entry for each installment payment is as follows:
- Debit: 3453 - Advance payments on income tax
- Credit: 5141 - Bank
At year-end, the final Corporate Tax is recorded as a debit to account 6701 - Income tax expense, and account 3453 is cleared through transfer.
Impact on Cash Flow Management
Corporate tax provisional installments have a significant impact on a company’s cash flow. Paying 25% of the reference tax each quarter represents a predictable cash outflow that should be anticipated.
For optimal cash flow management, it is recommended to:
- Set aside monthly provisions equal to one-twelfth of the estimated annual tax
- Anticipate deadlines by integrating provisional installments into the cash flow forecast
- Request an exemption if the current year’s results suggest a Corporate Tax significantly lower than the reference year’s tax
Filing and Payment on SIMPL IS
The SIMPL IS platform (Integrated Multi-service Online Payment System) of the General Directorate of Taxes is the mandatory channel for filing and paying provisional installments. Companies must:
- Log in to the platform with their credentials
- Select the declaration type (provisional installment)
- Enter the installment amount
- Complete the electronic payment via bank transfer
The electronic payment receipt serves as proof of payment and must be retained.
Upsilon Consulting is your premier tax partner. Our team of chartered accountants in Casablanca supports you in calculating, filing, and tracking your corporate tax provisional installments. Contact us.
Are your installments based on the correct rate? Verify instantly with our Corporate Tax Rate Calculator — it automatically integrates the 2023-2026 rate schedules and minimum contribution.
Frequently Asked Questions
How are corporate tax provisional installments calculated in Morocco?
Each provisional installment equals 25% of the corporate tax due for the previous fiscal year (the reference year). If the minimum contribution is higher than the calculated corporate tax, the installments are based on the minimum contribution amount instead.
When are provisional installments due in Morocco?
Companies must pay four quarterly installments at the end of the 3rd, 6th, 9th, and 12th month of the fiscal year. For a standard fiscal year ending December 31, the deadlines are March 31, June 30, September 30, and December 31.
Can a company be exempted from paying provisional installments?
Yes, if a company considers that the installments already paid equal or exceed the tax it will ultimately owe, it may request exemption by filing a declaration with the tax inspector at least 15 days before the next payment deadline. However, if the final tax exceeds the installments paid, the company must pay the balance plus penalties.
What penalties apply for late payment of provisional installments?
Late payment triggers a 10% surcharge on the unpaid amount, a 5% penalty for the first month of delay, and 0.50% for each additional month. These penalties are applied automatically without prior notice.
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