Abdelmalek Essaâdi University

National School of Commerce and Management

National School of Management
039-31-34-87/88/89
E-Mail: [email protected]; www.encgt.ma

Course of:

BUSINESS TAXATION

Level: 2nd Year (S4)

Professor: Younes ETTAHRI

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 Summary

Objectives

GENERAL INTRODUCTION

Chapter 1: GENERAL NOTIONS OF TAX

• Definition and function of tax

• Concepts of assessment, liquidation, and collection
• Classification of taxes

Chapter 2: THE MOROCCAN TAX SYSTEM

• The historical framework of Moroccan taxation.

• The limits and weaknesses of Moroccan tax policy
1970s.
• The characteristics of the tax structure after the reform of
1984.

Chapter 3: CORPORATE TAX

• Scope of application
• Determination of the taxable base
• The assessment and settlement of tax
• Case of application

Chapter 4: VALUE ADDED TAX

• Scope
• Taxable event and tax rate
• Mechanism of VAT
• Declaration regimes
• Partial deductions
• Application case

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 I * General objective of the course:

This course aims to provide students with the tax tools to optimally manage
tax files and understand the mechanisms of Moroccan taxation that result from
daily management of the company.

II * Specific objectives:
In terms of knowledge:

Know the fundamental principles that govern the main taxes.

In terms of attitudes:

No longer consider taxation only in terms of cost, but be able to integrate it.
as a decision-making element of the company's life.

In terms of skills:

Thanks to his knowledge, to be able to detect the existence of a tax risk and to
to resolve either alone or by calling for advice.

III* Teaching Methodology:

Hourly workload: 50 hours

- Summary and illustration of the course. 30 hours
-Supervised work focusing on the direct application exercises of the course or
synthesis. 20 hours

IV * Basic Document: CGI 2020

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 GENERAL INTRODUCTION

Morocco, like all developing countries, has often found itself facing
great difficulties in establishing a tax system that can on one hand ensure
a minimum of stable resources mainly due to the weakness of domestic savings and
on the other hand, which can enable balanced economic and social development.

The Moroccan tax system was characterized, on the one hand, by its hybrid nature where coexist
modern taxes such as the corporate tax (IBP) and very
old ones such as the patent tax.

It is characterized on the other hand by the importance of direct taxation over indirect taxation and
by the existence of numerous scheduled taxes that are sources of complexity and inequality.

On December 20, 1982, the House of Representatives adopted a framework law (Dahir No. 1.83.38)
of April 23, 1984 - Official Bulletin No. 3731 of May 2, 1984) concerning tax reform. This law defined
the fundamental objectives and the limits of this reform.

Indeed, correcting the disparities of the old system and instituting all measures aimed at
prevent and eliminate fraud and tax evasion within the framework of a legal procedure
ensuring the rights of taxpayers. Promote and strengthen the finances of
local authorities taking into account the requirements of economic and social development
in the context of social justice. Without undermining the measures aimed at
encouraging investment, such are the objectives of the 1984 reform.

Furthermore, the reform concerned direct taxes on the income of individuals and
morales, the tax on products and the tax on services.

Indeed, the framework law of 1982 provided for the establishment of a general income tax on individuals.
physical entities and a corporate income tax referred to as 'Tax
General on Income (later became IR) and Corporate Tax.

And on the other hand, to avoid the cumulative effect of taxes on the turnover at each stage of the
production and marketing, the tax on products and the tax on services have been
replaced by a single tax: the Value Added Tax (VAT).

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 Chapter 1: General Concepts of Tax

Section I: Definition and function of tax

A- Definition:

Without elaborating on the theories that taxes are the price of the services rendered.
by the State or the insurance premium paid by citizens to safely enjoy their
rights, we define tax as "a monetary payment required from the
taxpayers through public means on a permanent basis and without compensation for coverage
of public charges.
Some authors also add to this definition the idea that tax not only serves
to cover the costs but also to 'public interventions' in line with
modern role of the State. Others add the idea that tax is an instrument of
distribution of public charges based on the contributory capacities of citizens.
Whatever definition is chosen, it is a fact that, if the main objective of the tax
It is good to fund public coffers, it often has a strong complementary purpose.
important. Fiscal neutrality today gives way to fiscal interventionism which
manifests in many areas.

B-The functions of tax:

The evolution of tax has been characterized by the diversification of its functions:

I- Tax profitability:

The financial productivity of a tax system depends on its generality, its plurality, its
automaticity, its stability, and its elasticity.

1- The generality:
The tax is said to be general if it affects all taxpayers who have a capacity to contribute.

2- The plurality:
The multiplicity of taxes, unlike a single tax, allows the State
to apprehend the entirety of taxpayers.

3-Automaticity:
Increasing the tax rate allows for an increase in its revenue.

4- Stability:
The tax is stable if it remains intact in the face of exogenous phenomena.

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 5-Elasticity:
A tax is elastic if its revenue increases in the event of economic expansion.

II- Social equality:

Any tax system should aim to be fair or as least unfair as possible. However, two
positions are adopted: equality before tax and equality through tax.

Equality before tax:

This equality is based on two principles: universality and proportionality.
Universality: the tax must be borne by all.
Proportionality: A constant rate regardless of income level.

Equality through taxation:

It is conditioned by the progressivity and selectivity of the tax.

Progressivity: The tax rate varies with the taxable base.

Selectivity: The tax must take into account the importance of the taxable income.
nature of needs according to the form of the business...

III-The economic evolution/The economic function of tax:

The concept of tax neutrality is now outdated in favor of action.

through the tax on economic structures.
Thus, the tax allows for the implementation of a stimulus policy or a policy of
stabilization according to the economic situation and according to the objectives set by the authorities.
If the goal is economic expansion, taxes can be made an incentive factor for
consumption, investment, employment, etc.
Similarly, we can make tax an effective instrument if we aim for a policy of
stabilization.

Section II: Assessment, liquidation and collection of tax

To the tax base:

The tax base can be understood in 2 ways:

So let the base itself of the tax be, that is, the taxable matter to which
the tax applies.
So let the action of sitting be, that is to say, to establish the tax.
The tax base essentially includes the assessment of the taxable matter for
which various processes are applied.

I- Administrative evaluation:

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The assessment by the tax administration consists of determining the tax base, according to
techniques adapted to each category of tax and whose common feature is that it does not require
practically, taxpayers, no declaration or particular formality.

II- Withholding tax:

Withholding at source for the benefit of the treasury constitutes not only a method of assessment, but
also for tax collection.

III- The packages:

The package consists of determining an approximate tax base in agreement with

the administration and the taxpayer from a perspective of simplifying obligations
incumbent upon this one.

B-Liquidation of tax:

The settlement of the tax is the calculation of the amount to be paid generally by applying to the
base of the appropriate rate.
Although it can be considered a separate operation, liquidation is part of
the plate.
In this design, the base in the broad sense is the determination of the amount to be paid.

C-The tax collection:

Collection is the operation that consists of bringing tax into the treasury's cash.
It intervenes after the assessment and liquidation, and constitutes a separate operation that can be
entrusted to a service separate from that of the plate.

Section III: Classification of taxes

A- Administrative classification: Direct taxes / Indirect taxes

The distinction between direct and indirect taxes allows for the emergence of a very important concept.
that of the event generating the tax.

Certain taxes are classified as direct taxes, those that involve a person, and taxes
indirects, those that apply to objects or acts.
For other authors, direct tax is characterized by the permanence of the facts to which it is linked.
refers, which explains that it is generally perceived through the role.
Direct tax affects stable situations, while indirect tax affects events.
intermittents observed on a day-to-day basis.

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In another conception, similar to the previous one, it is the generating event (that is to say the ...
made on the occasion of which the tax matter is affected) which determines the direct or
indirect tax. If the triggering event is fixed (existence of a certain situation) or
occurs on fixed dates (income perception over a certain period), it is a
direct tax. If the triggering event occurs on non-fixed but fortuitous dates, or depending on
from the will of the taxpayers, it is an indirect tax.
In general, income taxes and capital taxes that reach the
taxpayers themselves to whom they are directly claimed are considered as
direct taxes. Consumption taxes, sales taxes, in particular
VAT, on the contrary, is an indirect tax.

B- Economic classification: income tax, expenditure, capital

In the comparisons of the tax burdens that weigh on taxpayers, one distinguishes in
in general, three categories of tax: income tax, wealth tax (capital), and tax on
expense.

I- Income tax:

In Morocco, there are two main categories of income tax depending on the status.
taxpayer's legal framework.

I.R.: Which constitutes an income tax in the strict sense, which is owed by the
natural persons, and accounts for nearly 15% (on average) of the total revenues
fiscal authorities.
I.S.: Which accounts for just over 10% of total tax revenues.
These two taxes have the characteristic of being general taxes that affect income.
global of taxpayers.

II- The consumption tax:

It affects the total expenses incurred by the consumer, these taxes on expenditure.
includes: VAT, ICT, customs duties.

III - The tax on capital or on wealth:

This type of tax does not exist in Morocco; however, there is a series of capital taxes.
These taxes that are often called special taxes on capital, which differ from
the capital tax in the sense: personal wealth.
Taxes on automobiles (sticker) and some registration fees (fees on the)
mutations), are examples of these special taxes.

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 C- Classification technique: corporate taxation/household taxation

The distinction made between business and household is that made by national accounting.
In tax matters, the distinction is sometimes difficult to make in order to delineate areas.
of the application of corporate taxation and that of households; because some taxes fall under
of the two tax systems (VAT and personal income tax). However, we still manage to do this.
distinction since a certain number of taxes are only paid by the
companies such as the I.S. and the patent tax. Others, such as the I..R., on income
salaries fall into the category: household taxation.

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 Chapter 2: The Moroccan Tax System

I. The historical framework of Moroccan taxation.

The current Moroccan tax system has deep historical ties; it is actually the
product of a long evolution that bears religious and socio-political marks specific to
context of the country. We can distinguish:

A. Taxation in ancient Morocco.

At that time, taxation was based on Islamic foundations derived from the Quran, of
prescriptions and actions of the prophet and teachings of the legal jurisprudences
Muslim in Islam.
On the eve of the protectorate, we find ourselves with a taxation adapted to the conditions.
economic and social conditions of the country and which attempts to draw inspiration from the taxation systems of the West

European with which the country has trade relations.

B. Taxation during the period of the protectorate

The contribution of this intermediate period is twofold.

1. In the 1eraphase, the colonial-type tax system had 2 characteristics:

-A permanence of direct taxes and their relative stability: we find 3 types:
▪ the agricultural order or tax;
▪ the urban tax
▪ the patent tax
They have low performance due to the narrowness of their plate and the weakness of their
rate
The predominance of indirect taxes:
It is with the concern of not burdening the existing direct taxes that the authorities of
the protectorate had to, in order to meet the financial and budgetary requirements of the State,
diversify the taxable base to reach the most taxpayers. We distinguish between:
• Customs duties
• registration and stamp duties
• the rights of the poor
• The sugar refining tax

2.At 2thphase marked by an extension of direct taxation in a way that

allows, on the one hand, to increase public resources that have suffered from the decline
the revenues from indirect contributions due to the decrease in the volume of
trade exchanges with the outside world in the aftermath of the Second World War
On the other hand, to modernize the tax system by introducing new taxes that
modify the relationship between direct and indirect taxation. such as:

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• The withholding on wages and salaries in 1939
• The creation of the corporate tax in 1954
• The indirect taxation in 1948 on the transaction tax which constitutes a tax
general information about the C.A

C. Taxation during the period of independence:

In the aftermath of independence, the choice of a system where the State was to play a role
preponderant seemed the only way to get the country out of underdevelopment and it is in
this perspective has initiated a development aid policy based on the grant
tax advantages.

The concern of the Moroccan authorities, in the wake of the declaration of independence in 1956
was to ensure the transition from a colonial-type economy to a national economy. It was necessary to
proceed with a conversion of socio-economic structures to adapt them to the objectives
of an appropriate economic and social development policy
The post-independence period will be marked by 2 successive contributions:

1. The tax arrangements after independence:

They intervene in 2 directions:
➢ The 1eraconcerns the reorganization, starting in 1957, of the customs tariff. A tax
12.50% ad valorem uniform duty on all imported products and taxes
Export duties are established on ores and citrus fruits

➢ The 2thconsists of the creation of 2 taxes:

the municipal tax established in 1956
the car vignette in 1957

The tax reform of 1961 affects various taxes:

➢ tax adjustments: concerning urban tax and withholding on salaries

and salaries
➢ the changes made to other taxes:
✓ The main reform that has been implemented is that of the tertib transformed into a tax.
agricultural
✓ the creation of the national investment fund, with a view to stimulating investments
deprived by the mobilization of savings for the purpose of industrializing the country
✓ The goods and services tax replaces the turnover tax.
✓ the business tax and the corporate profit tax have seen their base
to widen

2. The update of the tax system in 1978:

This is not a fundamental tax reform as stated in the plan.
five-year plan 1973-1977 but rather of technical rearrangements and adjustments

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 addressing cash flow needs and mitigating budget deficits further
more importantly :
➢ Regarding the urban tax: by introducing a new progressive scale through a
uniform proportional rate 13.50%
➢ Establishment of new taxes: It concerns:
✓ the tax on real estate profits hitting the profits made for the declared purpose of
discourage speculative real estate transactions
✓ The tax on urban land: double tax:
o Main tax at a uniform rate of 30% on the difference between the price
initial purchase and selling price
o Annual tax with a minimum rate of 1.50% and a maximum of 5.50%

Before addressing the main lines regarding the adjustments to the tax structure
Moroccan in the 80s, you are brought to observe a bit of the weaknesses of
tax system of the post-independence.

II. The limits and weaknesses of Moroccan fiscal policy in the 1970s.
A. The limits:

monetary inflationist. But if the increase in tax revenues is to be one of the

objectives of fiscal policy, there is also another important objective which is to create
positive incentives for productive private investment and to eliminate the factors
contrasting factors that constitute obstacles to any investment action.
The limits of a system can be measured in two aspects.

The fiscal yield.

The yield of taxes mainly depends on the different categories of taxes imposed.
work (direct taxes, taxes on products and services, taxes and duties on
import and export) and their potential for yield. Furthermore, the
The fiscal yield of a particular tax or a group of taxes depends on the base,
the scale of rates, its effects on the economy, and finally, but no less importantly, effectiveness
of the tax administration.

2. Tax collection:

It is observed in the period 1967-1975 that

On one hand, the main taxes (business license, corporate profit tax, and taxes
on products and services) are recovered at high rates exceeding 60%
On the other hand, unproductive taxes like the agricultural tax and urban tax suffer from
collection difficulties, as the concerned taxpayers are not always willing
to settle them within the normal deadlines of their due date.

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In general, tax collection raises issues regarding its processes and
also and especially, at its cost for the administration. And it is essential to simplify the
procedures and mechanisms for tax recovery. There is nothing that undermines as much
quickly the taxpayer's morale than the thought that taxes are not
Indeed recovered, that corruption exists within the tax administration.

According to Mr. Elktiri1It

can be said that tax collection in Morocco has reached its limits.
in the current socio-economic structures. We consider it possible that, through a
restructuring the current structures notably by implementing a balanced distribution
fair distribution of income and wealth, taxation can go beyond these limits, to achieve a
better collection and provide a higher yield and recovery

This point of view is of the utmost importance which will lead us to address the
weaknesses that this tax system conceals.

B. THE WEAKNESSES:

The Moroccan tax system falls within the framework of the tax systems of developing countries.
development with its own national variants. It draws well on the characters and
techniques of the model of industrialized countries that have the flaw of being unsuitable for the
situation and the state of development of the country. So it is a system that illustrates the
deficiency of a tax policy suited to underdevelopment. Among these weaknesses; we

Preference given to analytical taxes rather than synthetic ones:

Indeed, indirect taxation clearly prevails over direct taxation so that the low ...
relative importance of direct taxation, especially that of income tax
individuals and companies, limits the scope of fiscal policy which, from this
It does not play an effective role in achieving the objectives of the various.
programmes and strategies for economic development.

2. A laconic and fragmentary system

At that time, it did not include either a general income tax or a proper estate tax.
However, with the tax schedule, the less privileged social categories
favored, in this case employees, civil servants and private individuals are taxed on all the
stages: at the level of the deduction on treatment and salaries, the contribution
complementary, in addition to domestic consumption taxes and the municipal tax for
those who own housing. This situation undoubtedly creates
tax injustices.

1M. Elktiri, fiscal structures and economic structures, the case of the Moroccan economy.

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The Moroccan tax system is in perpetual construction:

It is still an unfinished work. But as it improves, the tax system becomes more complicated with
the coexistence of modern taxation techniques and a certain number of elements
outdated, unsuitable, and no longer relevant.

The issue of taxation in Morocco, like in all developing countries, is...

Development is conditioned by economic structures. Emphasis must be placed
on the relationship between economic structures and tax structures. Certainly
the action of taxation in the overall economic balance is decisive in this sense
that economic growth must necessarily occur under conditions of
stability.

Given the limited resources from external aid, domestic borrowing and the
non-fiscal revenues, the need is often felt to increase revenues
fiscal. And it is not always easy, despite the budget forecasts of a
bureaucratic administration of connecting needs to available resources
funding collected through taxation.

Furthermore, the revenue from taxation is mainly intended to cover expenses.

public, especially operating expenses whose budget evolves
considerably in recent years, as a consequence of an increase
excessive activities of the administrative machinery of the State. This results in the
capital expenditures and productive equipment are difficult to fit into the scheme of
financing through taxation since the proportion of national income collected by
the fiscal instrument is absorbed by the operating expenses of
the administration. It cannot therefore, in this case; serve development, because
There is no real development without the accumulation of capital.

Moreover, economic development makes it necessary to achieve balances.

economic, among other things a balance between public operating expenses and
equipment and more generally a balance between investment and
consumption on one hand, investment and savings on the other. These balances are
In the case of the Moroccan economy, they are fragile and this fragility constitutes a blockage to a
accelerated and sustainable development.

It took the shock of the debt crisis of the 1980s and adjustment policies.
structural that he imposed, to bring the State to engage in a process of
tax reform.

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III. The characteristics of the tax structure after the 1984 reform.2

A. Evolution of the tax structure.

1. Characteristics of the tax and tariff system

In the early 1980s, the Moroccan tax system was characterized by:
A multiplicity of rights and taxes affecting the same base but with different deductions and
exemptions
• Ad-hoc and partial measures introduced by the Finance Laws to increase the
fiscal receipts;
• A progressive generalization of investment codes and consequently the expansion
significant of the fields of deductions.
From 1985 and according to the objectives of the SAP, fiscal reforms were introduced including
the main ones are:
The adoption of the IGR which replaced the scheduled taxes and the complementary contribution;
The replacement of the GST by the VAT;
The introduction of FIS in place of IBP;
The simplification of the customs tariff and the improvement of its transparency;
The elimination of quantitative restrictions and their replacement with tariffs;
The reduction of maximum rates from 100% to 35% by reducing the number of quotas to 6.
rates.
The analysis of the Moroccan tax system and its evolution over the last 15 years shows
to express a stability regarding the relative importance of the main categories of rights
and taxes. Thus, direct taxes represented 24% in 1980 and 23.4% in
1994.
The relative share of indirect taxes has experienced a more varied evolution, moving from 41
from 48.5% in 1980 to 1994 after having represented more than 50% of tax revenues between
1986-1989, due to the establishment of the oil levy in 1986.

As for taxes on foreign trade, after decreasing between 1984 and 1986, their share
The relative has increased since 1988 with the establishment of the PFI to reach
currently more than a quarter of tax revenues.
The stability of this share illustrates the lack of maneuverability and the difficulty that there will be.
to adapt the Moroccan tax system after the adoption of the agreement with the EU to
compensate for the losses of customs revenue that will result from this

2. import duties and taxes:

Imports are subject to two distinct duties: the import duty (DI) and the
import fiscal levy (IFL).
The DI varies according to the nature of the products. It currently includes 13 different rates.
(26 in 1987) practiced to protect the industry. The maximum rate of the DI, which was

2Taken from the IMF report of 1996

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 100% was reduced to 45% in 1986. Since 1993, the rates of 40% and 45% no longer apply.
more than a few agricultural products, the maximum rate for other products has been
brought down to 35%.

The PFI is a uniform rate of 15% whose objective is fiscal. It is the consolidation of the
TSI, the customs stamp and other ancillary duties.
The main disadvantages of the current import taxation system are:
The large number of rates that remain in effect for the DI;
The significant share of imports benefiting from a zero rate.

3. VAT / IS / IGR

Value added tax:

In 1985, the VAT replaced the GST. It currently includes three rates.
(7%, 14%, 20%), the normal rate is 20%, the 7% rate mainly concerns water.
electricity and certain food products, the one of 14% concerns activities
related to tourism.
The analysis of the structure of internal VAT taxation by rate shows that the amount of the
VAT at 19% accounts for more than 75% of the tax due, the rates of 7% and 14% represent
respectively 12.4% and 12% of the total amount, the proportion of taxable activities
the normal rate for 1996 is estimated at 85%.

Corporate tax
The corporate tax was introduced in December 1986 to replace the profit tax.
professional (IBP). The tax rate, which was 52% for the IBP and 45% for
PIS experienced a decrease to 40% in 1988, then to 38% in 1993 and is currently set at
at 36%.
The corporate tax is a tax whose payment is spontaneous and occurs on self-determined bases.
by the taxpayers. If its characteristics facilitate its general administration, a
important effort must be made by the tax administration to better understand the
defaulting taxpayers and verify the accuracy of company declarations, in
particularly the companies in permanent deficit that suggest an absence of
declarative sincerity

The general income tax

The IGR consolidated the various income taxes in 1990 (113P, the agricultural tax, the
PTS, the urban tax on actual or imputed rental income and the tax on interest and
dividends) and the additional contribution.
The marginal tax rate on income tax (44%) is higher than that of companies.
To mobilize revenue, the minimum contribution for taxpayers must be raised.
individuals engaged in industrial and commercial activities at 1% of their revenue
currently set at 0.5%

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17
 Chapter 3: CORPORATE TAX

Corporate Tax (IS) is a direct tax that is mandatorily applied to the entire
products, profits, and revenues of capital companies and other legal entities, and by
option for partnerships.
established in Morocco since 1986, the IS has replaced the former IBP (Corporate Tax)
Professional profits) that previously indiscriminately imposed the profits of
natural and legal persons.

I - Scope of application:

The corporate tax mainly targets the profits of companies established in the form of a corporation.
capital that engages in profitable activities in Moroccan territory, regardless of their
nationality.

1 - Persons who are compulsorily taxable: (article 2)

Are necessarily subject to corporate income tax:

- capital companies: public limited companies (SA), limited liability companies
(SARL) and limited partnerships by shares (SCA).
public institutions that engage in industrial or commercial activities as well as
those who provide services.
other legal entities (associations, clubs, groups) provided that they engage in
profit-making activities.
As of January 1, 2014, large agricultural companies generating revenue
greater than or equal to 5,000,000 DH will now be taxed according to a progressive approach.

2 - Taxable persons by option:

these are partnerships, particularly general partnerships (SNC), companies

in simple limited partnership (SCS) consisting only of individuals and companies in
participation (SP).

3 - Persons outside the scope: (article 3)

it concerns partnerships when all partners are natural persons except

the case where these companies choose to be subject to corporate tax.
the so-called transparent real estate companies whose assets consist of a single unit of
housing occupied by members of the company or land intended for construction...

4 - Exempt persons: (article 6)

This concerns:
- associations, leagues, organizations, and non-profit foundations;
- cooperatives whose annual revenue does not exceed 5,000,000 DH.
livestock breeding companies, for the profits derived from this activity.
Agricultural companies with an annual turnover of less than 5,000,000 DH.
exporting companies during the first 5 years of export (those having
carried out their first export before the 1stheJanuary 2020)...

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II - The taxable base:

The corporate tax is calculated based on the tax result, which is obtained from the accounting result.
which is adjusted by reintegrations and deductions according to the formula below. (Article 8)

Accounting result = Income - Expenses

Tax result Taxable products - Deductible expenses
Tax result Accounting Result
+ non-deductible charges (Reintegrations)
Non-taxable products (Deductions)

Tax Result = Accounting result + Reintegrations - Deductions

The fiscal result (FR) is equal to the accounting result increased by the reintegration of expenses
non-deductible and reduced by non-taxable products (exempt).

1 - Taxable products: (article 9)

Taxable products are determined from operating products, products

financiers and non-current products.

a - operating products:

Operating products consist of:

the turnover including the income and acquired receivables related to the
delivered products, returned receipts, and completed construction work;
the variation of product stocks;
accessory products including rental or transportation income, royalties
patents, trademarks or licenses...;
the fixed assets produced by the company for itself;
operating grants;
the other operating products;
the resumption of operations and the transfer of charges.

b - financial products:

Taxable financial products are:

the products of equity interests and other fixed assets;
foreign exchange gains;
accrued interest and other financial products;
financial recoveries and charge transfers.

Note:

The dividends from profit distribution are incorporated into the products.
financiers of the beneficiary company, but they benefit from a 100% reduction because they have
a withholding tax on the corporate income tax.
Since January 1, 2013, the withholding tax rate on income from shares,
social shares and related income has been increased by 10% to 15%.

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Interest from fixed-income investments must be incorporated into the products.
financiers for their gross amount. The 20% non-definitive withholding tax on corporate tax is
considered as a tax credit offset against corporate tax.

c - non-current products:

Non-current products concern:

the proceeds from the disposal of fixed assets;
the balance subsidies;
the other non-current products;
non-current recoveries and transfers of charges.

Note:

Since January 1, 2009, the allowances applied to capital gains from disposal
The intangible and tangible elements of fixed assets are repealed. Consequently, the
gains realized by the company following the sale or withdrawal of certain elements of
Tangible assets are now taxable.

2 - Deductible expenses: (article 10)

For an expense to be deductible, it must meet the following 4 conditions:

• she must be engaged for the needs of the operation;

• it must be recorded in accounting;
• it must be committed during the fiscal year;
• it should result in a decrease in net assets.

deductible expenses include operating expenses, financial charges and

non-recurring charges.

a - operating expenses:

Operating expenses consist of:

the purchases of goods resold in their current state and the consumed purchases of materials and
supplies;
the other external costs incurred for the needs of the operation, including:
• promotional gifts with a unit value of 100 DH bearing either the company name,
either the name or the acronym of the company, or the brand of the products it manufactures or
She does trade.
• donations in cash or in kind granted to associations and establishments
recognized as being of public utility are deductible without any limitation regarding the
granted amount.
• donations in cash or in kind granted to the social works of public enterprises
or private organizations that are authorized by law to receive donations are deductible in the
limit of 2% of the donor's pre-tax revenue
• the premiums related to life insurance, contracted for the benefit of the company on behalf of
of their leader, are not deductible for the years of their payment.
However, the compensation received in the event of the insured person's death is taxable under
deduction of premiums paid.

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 • the premiums related to life insurance, taken out for the benefit of the staff of
Companies are deductible because they are akin to salary supplements.
However, the compensation received following the death of the insured person is taxable without
deduction of premiums already paid.
the taxes and duties borne by the company, including the business license, the urban tax,
vignette... with the exception of the IS, the provisional payments and the minimum contribution.
personnel costs and related social charges including remuneration of
executives, special bonuses and attendance fees.
other operating expenses
operating grants

b - Financial charges:

Deductible financial charges are:

the interest charges paid on the loans taken out by the company.
however, the interest paid to partners as remuneration for the current account is
deductible subject to the condition that:
• the share capital must be fully paid up,
• the total amount of current accounts cannot exceed the share capital
• the remuneration rate cannot exceed the rate on the 6-month BT for the financial year
previous
the exchange losses to which we add the positive translation differences,
other financial charges;
financial allocations.

c - Non-current liabilities:

non-recurring charges relate to :

the net book values of the disposed fixed assets
the subsidies and donations granted by the company to certain organizations;
other non-recurring expenses are deductible except for fines, penalties and
penalties of all kinds imposed on the company for violations of the provisions
legal or regulatory;
non-current allocations.

Remarks:

invoices for which the total amount including tax exceeds 5,000 DH and for which payment is not justified by
a bankable means (crossed check not endorsable, commercial paper, transfer...), are not
deductible only up to 5,000 MAD per day, per supplier not to exceed 50,000
DH per month; (Article 11)
The fiscal deficit of an accounting period can be deducted from the profit of the accounting period.
next. In the absence of profit or in the case of insufficient profit for the deduction to be possible
to be fully or partially operated on, the remainder is carried over until the fourth fiscal year that follows
the deficit exercise (except for the part of the deficit related to amortizations). (Article 12)

Net Fiscal Result = Accounting Result + Reintegrations - Deductions - Carried Forward Deficit

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III - Tax liquidation:

The corporation tax is calculated based on the taxable income; however, its amount cannot be lower,
for each exercise, regardless of the tax result, there is a minimum contribution.

1 - Calculation of corporate tax:

Theoretical IS Net Fiscal Result * rate

The corporate tax is a progressive tax whose rate is based on taxable profit. Apart from the
exemptions and specific rates in effect, the tax paid by a company depends on
the importance of its tax benefit. The current scale (LF 2020) includes three rate brackets:

Amount of net profit (in dirhams) Rate

Less than or equal to 300,000 10%
From 300,001 to 1,000,000 20%
Greater than 1,000,000 31%

2 - Calculation of the minimum contribution (MC): (Article 144)

The minimum tax is a minimum tax that taxpayers are required to pay even in
the absence of profit. The amount of corporate tax owed cannot be less than the minimum rate regardless of the
tax result of the company.
The calculation base for the CM consists of the following tax-excluded products:
the turnover (CA)
accessory products (PA)
financial products (FP) except dividends
the subsidies and donations received.

CM = (CA + PA + PF + Subsidies and donations received) * rate

the normal rate of the CM is set at 0.5%, however its amount cannot be less than
3,000 DH.

3 - Calculation of the tax due:

After calculating the theoretical corporate tax and the CM, it is necessary to determine the amount of tax due.
in the context of the financial year. Three cases can be distinguished:

1st Case If CM > IS calculated; Tax due = CM

2nd Case If corporate tax < calculated corporate tax; Tax due = calculated corporate tax

3rd Case If corporate tax = calculated corporate tax; Tax due = calculated corporate tax = corporate tax

IV - Payment and regularization of the tax: (Article 177)

The corporate tax must be paid spontaneously according to a system of quarterly installments with
regularization, once the result of the exercise is definitively known.

1 - Provisional payments:

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The corporate tax is paid in the form of four provisional installments, each equal to 25% of
amount of the tax owed for the previous financial year and this before the expiration of the 3rd, 6th,
9th and 12th month from the start of the fiscal year. (1st installment before March 31; 2nd
acompte avant le 30 juin; 3ème acompte avant le 30 septembre; 4ème acompte avant le 31
December.

2 - Regularization of corporate tax:

After determining the tax owed, adjustments are made taking into account the
Payments already made. Two cases can be distinguished:

1st Case: Tax due > Total of advances; the difference constitutes a balance to be paid before
March 31 of the following fiscal year.

Balance = Tax owed - Total of installments

2nd Case: Tax owed < Sum of advances; the difference constitutes a surplus to be applied
on the first installment, and if applicable on the other installments.

Surplus = Sum of down payments - Tax owed

If the 4 payments could not absorb this surplus, the remaining amount is refunded by the State before
January 31.

Case of illustrations:

Case 1: Tax treatment of granted donations

In the fiscal year 20N, company ABC granted 180,000 DH in donations as follows:
National Olympic Committee 50,000 excluding tax

Own social works committee 100,000 HT

Social works of a non-profit association: 30,000 excluding tax
CA HT in 20N: 24 MDH
Deductibility threshold: 24MDH x 2‰ = 48,000 DH
National Olympic Committee: Without limitation
His own social work committee: Limitation 2‰
Social works of a non-profit association: Limitation 2‰
Surplus to reintegrate: (100,000 + 30,000) - 48,000 = 82,000 DH

Case 2: Tax treatment of leasing on personal cars (Example 1)

During the fiscal year 20N, the company ABC acquired a vehicle through a lease agreement.
under the following conditions:
Acquisition cost: 120,000 including tax
Depreciation rate at the leasing company: 30%
20/01/20N to 30/09/20N
Monthly fee: 20,000 DH
Since the acquisition value of the vehicle is less than 300,000 including tax, none
reintegration is therefore to be carried out.

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Case 3: Tax treatment of leasing for personal cars (Example 2)

During the fiscal year 20N, the company ABC acquired a vehicle through a lease agreement.
under the following conditions:
Acquisition cost: 480,000 including taxes
Depreciation rate at the leasing company: 30%
01/01/20N to 30/04/20N
Monthly fee: 60,000 DH
Theoretical depreciation (SL) (480,000 x 20%) x 4/12 = 26,666.67 DH
1,2
Theoretical amortization part deducted. (300,000 x 20%) x 4/12 = 20,000 DH

To reintegrate 26,666.67–20,000 = 6,666.67 DH

Case 4: Processing of passenger car DEA

The operating allocations for amortization as of 31/12/20N of the Company XYZ include
that of a passenger vehicle acquired on 02/04/20N for 330,000 MAD excluding tax.
Allocation calculated by the company 59,400 DH
Amortization part. Deductive Theory. (300,000 x 20%) x 9/12 = 45,000 DH
To reintegrate 59.400–45.000 = 14.400 DH

Case 5: Tax treatment of partners' current account advances

Total progress: 1MDH, since 1er January 20N.

Rate: 9%
The fully paid-up capital as of the 1stheMars and rises to 600KDH.
Accrued interest: 1MDH x 9% = 90,000 HT
Deductible interests calculated from the release of capital with a base of 600KDH
600,000 x 3.69% x 10/12 = 18,450 DH
Surplus to reintegrate: 90,000–18,450 = 71,550 DH

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 Abdelmalek Essaâdi University
National School of Commerce and Management
National School of Management
039-31-34-87/88/89
E-Mail: [email protected]

COMPANY TAXATION 2thYear (S : 4)

Series 1: Corporate Tax

Application 1:

Reproduce the following table and indicate the tax status applicable to the legal entities listed.
(check the correct answers) :

IS On this Exempted Excludes

Legal entities mandatory option of the IS of the IS
Partnership Companies
Limited liability companies
Limited partnerships
including PMs
Partnerships
Insurance companies
Non-profit organizations
The partnerships
The companies operating in the areas
of industrial acceleration
Sports clubs
Credit institutions
Economic interest groups

Application 2 :

DELICE DU NORD is a public limited company with a capital of 620,000 DH, established in 2002 and specialized in the
fast food.
The analysis of the company's accounting information for the closed accounting periods
respectively on 31/12/2018 and 31/12/2019 reveals the following elements:

For the financial year 2018:

• Sales excluding tax 8,765,000

• Accessories excluding tax 432.800
• Accounting result 875.000
• Non-taxable products 42,000
• Non-deductible charges 245,000

For the fiscal year 2019:

• Sales excluding tax 9,755,000

• Accessories excluding tax 529,000

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 • Taxable financial products 92.800
• Accounting result 824.100
• Non-taxable products 112,500
• Non-deductible charges 313.400

The provisional payments made by the company during the 2018 financial year amount to 145,000.

1.Determine the tax owed by the company for the two financial years and proceed with its
liquidation.
2. Calculate the net accounting results of the two fiscal years.

Application 3 :

TARGET is a limited liability company with a capital of 300,000 dirhams fully paid up. It specializes
in the marketing of pharmaceutical products.
In order to determine its tax result for the fiscal year 2019, it provides you with the
following information:

Elements Amount
Accounting profit 660,000
Fiscal deficit of the 2017 fiscal year (10,000 DH in amortizations) 30,000
Fiscal deficit of the 2018 fiscal year (10,000 DH in depreciation) 45,000
Minimum contribution for the year 2018 12,000

PRODUCTS:
Revenue 33,800,000
2. Accessory products 130,000
3. Financial products (including 12,000 MAD in dividends) 26,000
4. Non-current assets 35,000

CHARGES :
Compensation of the company's executive 72,000
2. Professional tax paid in cash 6.300
3. Reception costs organized by the company 8.500
4. Borrowing interests 5,000
5. Repair costs for a vehicle paid in cash 13.400
6. Special tax on the personal vehicle of the company's executive 2.750
7. Provision for litigation following the dismissal of an employee 800
8. Fines for violation of the highway code 600
9. Grants awarded to the social works of the company 5.000
10. Depreciation of the executive's car whose original value is
120,000 MAD including tax. Allocation = 120,000 * 20% 24,000
11. Interests of the current account of the Manager credited with 400,000 DH, remunerated at
rate of 9%. 36,000

All amounts are expressed excluding tax unless otherwise stated. The rate on 6-month treasury bills
of 2019 is 7%

1. Calculate the fiscal result of the fiscal year 2019

2. Calculate the theoretical corporate tax and the C.M. for the fiscal year 2019
3. Determine the corporate tax due for the fiscal year 2019
4. Proceed with the regularization of the corporate tax.

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Application 4 :

The company MRM is a public limited company with a capital of 700,000 DH fully paid up (7,000 shares at 100 DH)
It specializes in the production and marketing of women's clothing.

For the fiscal year 2019, she is providing you with the following information:

Elements Amount
Accounting profit 325,000
Deficit of the 2018 fiscal year 67,800
Minimum contribution for the year 2018 24,000
For the products:
Revenue 10,340,000
Rental income 65,000
Transport billed to customers 72.600
Attendance tokens received 24.800
Financial products (including 25% dividends) 86,000
For the charges:
Office supply purchases paid in cash 15.400
Repair of the CEO's personal car 8,300
Customs duties related to the importation of equipment 46,000
Lease payment for a passenger car (excluding VAT) 35,000
Annual workers' compensation insurance premium paid on 01/10 18,000
Dividends paid to shareholders at the rate of 10 DH per share 70,000
Interests on the partners' current account calculated at a rate of 12% on a
advance of 900,000 DH paid on 01/04/2019. The rate on the 6-month BT
is 10% 108,000
Payments made to employees 17.860
Promotional gifts for clients: 400 units at 75 DH each. 30,000
Declining depreciation of transportation equipment acquired on 31/03/2019
for an amount of 120,000 including tax 48,000
Provisions for doubtful debts 5.600
Late paid patent (including 650 DH surcharge) 2.450
Employer contributions paid to the CNSS 6,800
Provisional payments of corporate tax 24,000
Grants awarded to social works of the urban municipality 11.380
Life insurance premium taken out by the company for the benefit of the director
general included in his salary and subject to income tax 3.400

1. Calculate the tax result for the fiscal year 2019.

2. Determine the corporate tax due for the financial year 2019.
3. Proceed to the liquidation of the corporate tax.

Application 5 :

The company ZINTEX is a limited liability company with a capital of 1,500,000 dirhams fully paid up. It was established in
2008 and completed its first export operation in 2016.
For the fiscal year 2019, she provides you with the following information:
Elements Amount
Result before tax (profit) 234,000

PRODUCTS:
Local revenue 4,300,000
Revenue from abroad 2,700,000
Accessory products 185,000

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 Dividends received 42.300
Gross interest on term account 22.200
Proceeds from the sale of a fully depreciated truck 130,000

CHARGES :
Purchases of goods recorded including tax 30,000
Commissions paid to various service providers in cash 28,000
Promotional gifts to customers (125 dh each) 18.700
Postage stamps 5,000
Grants awarded to the social works of a public enterprise 21.880
Life insurance premium taken out for the benefit of the company on behalf of its
leader. The latter passed away in May 2019, the compensation received is
450,000 dirhams not accounted for. The total bonuses paid until the end of 2014. 10,000
amounts to 120,000 dirhams
Purchase of two computers paid by check 15,000
Travel invoice paid in cash 9,000
Professional tax 24,000
Provisioned payments of corporate tax 40,000
Bank interest and fees 14,600
Depreciation of a machine related to the fiscal year 2018 50,000
Depreciation of a passenger car at a rate of 25% 95,000
Provisions for judicial disputes 4.360
Provisions for various risks 13.400
Interest on associate current account credited with 1,000,000 dirhams at the rate of
14%. The rate on the 6-month BT is 9% 140,000
Tax fines for violations of the highway code 6.800
Advance to the supplier paid by check on an order that will be delivered
and invoiced at the end of 2020 16,000
Penalties for late delivery of goods 14,700

1. Calculate the tax result for the fiscal year 2019;

2. Determine the corporate tax due for the 2019 financial year;
3. Proceed with the regularization of the corporate tax.

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 BIBLIOGRAPHY

• Aaouid, B. (2018), "The taxation of Moroccan enterprises", The

Maghreb Editions

• Cozian, M., Deboissy, F. (2015), "Summary of Corporate Taxation"

39th edition, LexisNexis;

• De Bissy, A. (2014) "Accounting and taxation, from the accounting result"

to the tax result" LexisNexis

• Practical Taxation

• Business Taxation
El Watanya Printing and Stationery

• Tax Department: General Tax Code (2020);

• Tax Department, Circular notes regarding provisions

fiscal laws of the finance laws 2012 - 2020;

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