Morocco’s 2025 budget law, published in the official bulletin on 19 December 2024, introduces priority tax and customs measures in line with the country’s strategic orientation, including strengthening the foundations of the social state, boosting investment and creating job opportunities, implementing structural reforms, and sustainability of public finances and maintenance of macro-economic balances.
As part of the government’s commitment to social dialogue, income tax reform aims to reduce the tax burden on employees and pensioners, while enhancing their purchasing power.
As part of the ongoing implementation of framework law no. 69-19 on tax reform in Morocco, and the fulfillment of the government’s commitment under the April 2024 agreement on social dialogue to improve employees’ purchasing power, the 2025 Finance Law provides for the following:
The new progressive tax scale applies to income earned on or after 1 January 2025.
The 2025 Finance Law increased the annual amount of the income tax reduction for dependents to MAD 500 (instead of MAD 360 before the 2025 Finance Law) per dependent, with an annual ceiling of MAD 3,000.
This provision applies to income earned on or after 1 January 2025.
The daily amount of food vouchers that may be issued by employers has been increased from MAD 30 to MAD 40. These vouchers can now be paid electronically.
The main measures are as follows:
Prior to the entry into force of the 2025 Finance Law, the scope of application of the income tax did not allow for the inclusion of certain income of individuals that did not fall into one of the five categories of income and profits subject to this tax, as set out in article 22 of the General Tax Code.
In accordance with the provisions of the 2025 Finance Law, a sixth category of income has been introduced, known as “other income and gains.”
The following types of income and gains are considered as other income and gains for purposes of the income tax:
The 2025 Finance Law introduces new measures concerning retirement pensions and life annuities paid under basic pension regimes. The law provides a total exemption from income tax from 1 January 2026, and an exemption from the obligation to file the annual global income tax return for those who have only these exempt pensions and life annuities.
As a transitional measure, a 50% reduction in the amount of tax due on pension and retirement income will apply during 2025.
This exemption does not apply to retirement pensions and life annuities paid under complementary pension regimes, which remain subject to income tax under ordinary law.
The 2025 Finance Law harmonises the tax treatment of supplementary pension buy-backs for which contributions have not been deducted through the following measures:
The 2025 Finance Law reforms the taxation of real estate income with the introduction of a simplified system. The main provisions include:
The 2025 Finance Law clarifies the tax regime applicable to property gains arising from the transfer of real estate or real property rights from an individual’s private assets to business assets, in the following cases:
The 2025 Finance Law clarifies that the contribution of shares in unlisted real estate companies by individuals is now eligible for the tax deferral scheme set out in Article 161 bis-II of the General Tax Code, which provides for deferral of payment of income tax on profits generated by the contribution of real estate or real-estate rights.
Salaheddine Nadif
BDO in Morocco
As part of the government’s commitment to social dialogue, income tax reform aims to reduce the tax burden on employees and pensioners, while enhancing their purchasing power.
Reform of the Income Tax Scale
As part of the ongoing implementation of framework law no. 69-19 on tax reform in Morocco, and the fulfillment of the government’s commitment under the April 2024 agreement on social dialogue to improve employees’ purchasing power, the 2025 Finance Law provides for the following:
- Increase in the first tax bracket for exempt net income from MAD 30,000 to MAD 40,000 per year;
- Revision of the other brackets of the tax scale to broaden them and reduce their rate of income tax, resulting in a reduction in these rates of up to 50%;
- Reduction of the marginal rate from 38% to 37%.
| Current income tax brackets (MAD) Previous rates |
Income Tax brackets under FL 2025 FL 2025 (MAD) rates |
| 0 to 30,000 0% | 0 to 40,000 0% |
| 30,001 to 50,000 10% | 40,001 to 60,000 10% |
| 50,001 to 60,000 20% | 60,001 to 80,000 20% |
| 60,001 to 80,000 30% | 80,001 to 100,000 30% |
| 80,001 to 180,000 34% | 100,001 to 180,000 34% |
| Above 180,000 38% | Above 180,000 37% |
The new progressive tax scale applies to income earned on or after 1 January 2025.
Increase in Annual Income Tax Reduction for Family Dependents
The 2025 Finance Law increased the annual amount of the income tax reduction for dependents to MAD 500 (instead of MAD 360 before the 2025 Finance Law) per dependent, with an annual ceiling of MAD 3,000.This provision applies to income earned on or after 1 January 2025.
Increase in Amount of Food Vouchers
The daily amount of food vouchers that may be issued by employers has been increased from MAD 30 to MAD 40. These vouchers can now be paid electronically.
Revision of Conditions for Exemption from Training Compensation
The main measures are as follows:
- All interns, including nongraduates, will be exempt from income tax on the gross monthly internship allowance, capped at MAD 6,000;
- The internship period eligible for this exemption will be reduced from 24 months to 12 months;
- The exemption is maintained for up to 12 months in the event of a change of employer;
- When a trainee is hired under an open-ended contract, his/her gross monthly salary, capped at MAD 10,000, is exempt from income tax for a period of 24 months from the date the contract is signed.
Expansion of Taxable Income Categories for Income Tax Purposes
Prior to the entry into force of the 2025 Finance Law, the scope of application of the income tax did not allow for the inclusion of certain income of individuals that did not fall into one of the five categories of income and profits subject to this tax, as set out in article 22 of the General Tax Code.In accordance with the provisions of the 2025 Finance Law, a sixth category of income has been introduced, known as “other income and gains.”
The following types of income and gains are considered as other income and gains for purposes of the income tax:
- Income assessed under the procedure for examining taxpayers’ entire tax situation, the source of which has not been justified;
- Foreign-source gambling winnings via the Internet, whatever their form;
- Miscellaneous income and gains from profit-making operations that do not fall into another income category.
Exemption for Retirement Pensions and Life Annuities
The 2025 Finance Law introduces new measures concerning retirement pensions and life annuities paid under basic pension regimes. The law provides a total exemption from income tax from 1 January 2026, and an exemption from the obligation to file the annual global income tax return for those who have only these exempt pensions and life annuities.As a transitional measure, a 50% reduction in the amount of tax due on pension and retirement income will apply during 2025.
This exemption does not apply to retirement pensions and life annuities paid under complementary pension regimes, which remain subject to income tax under ordinary law.
Revision of Tax Treatment of Buy-back of Supplementary Pensions for Which Contributions Have Not Been Deducted
The 2025 Finance Law harmonises the tax treatment of supplementary pension buy-backs for which contributions have not been deducted through the following measures:
- Exemption of benefits paid out at the end of supplementary pension contracts, subject to these contracts being concluded for a minimum period of eight years;
- Clarification of the tax treatment of benefits under supplementary pension contracts and those under life insurance or capitalisation contracts, paid before the expiry of the eight (8)-year period.
- The aforementioned period is not taken into account in the event of the death or disability of the person concerned, as is the case for long-term savings plans.
Improved Regime for Taxing Real Estate Income
The 2025 Finance Law reforms the taxation of real estate income with the introduction of a simplified system. The main provisions include:
- An option for a “liberating” flat rate: taxpayers may opt for taxation at a flat tax rate of 20%;
- Administrative simplification: taxpayers opting for this new system are exempt from filing an annual global income tax return for this property income.
Taxation of Transfers of Real Estate From Private Assets to Business Assets
The 2025 Finance Law clarifies the tax regime applicable to property gains arising from the transfer of real estate or real property rights from an individual’s private assets to business assets, in the following cases:
- Taxation of property gains when the value of the transfer exceeds the original acquisition price of the assets concerned;
- Exclusion from the scope of income tax when the transfer is made at the original acquisition value.
Clarification of Eligibility of Contributions of Shares in Real Estate Companies for the Tax Deferral Scheme
The 2025 Finance Law clarifies that the contribution of shares in unlisted real estate companies by individuals is now eligible for the tax deferral scheme set out in Article 161 bis-II of the General Tax Code, which provides for deferral of payment of income tax on profits generated by the contribution of real estate or real-estate rights.Salaheddine Nadif
BDO in Morocco