Taxation

Overview of Moroccan Tax System:

Under the Moroccan tax system, non-residents are taxed on income arising from Moroccan sources only and are liable to a number of property related taxes highlighted below.

VAT: the current rate is 20% and is included in the purchase price.

Moroccan income tax is payable on income arising in Morocco.

Moroccan income tax is payable at progressive rates on income after allowable deductions for expenses incurred in connection with letting, selling or maintaining the property. There is no tax during the three years following the year of completion of new built property.

Local Property Taxes:

In Morocco, they are two main local taxes which are equivalent to the UK Council Tax. They are “Taxe d’habitation” & “Taxe de services communaux”. They are calculated on the property’s annual rental value, determined by comparison or direct appreciation by The Census Committee. There is a 75% tax allowance if the property is your main residence and if you make no income from it.

Capital Gains tax:

the capital gains tax is calculated on the real estate profit. The taxable profit is calculated by taking the difference between the price at which the property is sold, reduced by the selling costs, and the purchase price, increased by purchase costs.  Capital gains are taxed at 20% with a minimum of 3% of the selling price to be paid (even if there is no gain).

Moroccan Inheritance Tax:

there are no Inheritance Taxes to pay in Morocco. However, if you are a British resident, you may have to pay UK inheritance tax based on your worldwide assets, which incorporates Morocco. It is recommendable to consult a tax adviser or the UK Inland Revenue for more information.

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