Rental income tax in Morocco
When an owner rents out real estate, whether residential (villa, apartment or studio) or professional (office, commercial or industrial premises), he must pay a tax on the rents he receives.
Since January 1, 2019, the calculation of property income tax has been simplified.
Only two final rates have been applied since this date, namely 10% or 15% on gross taxable property income.
Determination of gross taxable property income
Gross taxable property income is made up of the total gross amount of rent minus the charges borne by the owner on behalf of the tenants (co-ownership charges, water consumption, guardian’s remuneration, maintenance costs, municipal service tax relating to the rented property when it is distinguished in the contract…).
The following are not deductible: certain charges incumbent on the owner, such as the fire insurance premium, major repairs not having the character of simple rental repairs, construction, reconstruction or development work aimed at embellishing or expansion of the rented property…
How to properly establish the amount of rent in a rental contract?
For example, for a monthly rent of 7000 DH, the amount should be detailed as follows:
Main rent: 6,063.35 DH
Municipal service tax 10.50%: 636.65 DH
Condominium fees: 300.00 DH
Monthly total: 7,000.00 DH
The exemption case
We are exempt from IR when the annual cumulative taxable property income is less than or equal to 30,000 DH.
However, even if he is exempt from income tax, the lessor must file his annual declaration of property income provided for in article 82 ter of the C.G.I.
The rates applied
Since January 1, 2019, two proportional discharge rates have been applied:
10% applied to the cumulative gross taxable property income of less than 120,000 DH
15% applied to the cumulative gross taxable property income greater than or equal to 120,000 DH
Declaration and payment of tax
Owners who rent out property to individuals will have to make an annual declaration of their property income online and pay the tax due, before March 1 of year n+1 for income for year n.
Since January 1, 2019, for natural persons who rent out property to legal persons or natural persons whose professional income is determined according to the real net result regime or the simplified net result regime, tenants will have to make a deduction at source in respect of gross taxable property income paid to their lessors. The latter (the tenants) must pay the tax withheld at source, to the tax authorities, before the expiry of the month following that during which the withholding tax was made.
However, the owners, natural persons, can opt for a declaratory regime. In this case, they must make the request for the property or properties subject to the rental for which they wish to opt for spontaneous payment, with the tax authorities. This request gives rise to the issuance of a deposit receipt. A copy of the latter must be given to the tenants concerned so that they do not proceed with the deduction at source.
Example
Here is an example of calculating the municipal services tax:
1) For the case of a main residence with an annual rental value of 60,000 DH located within the perimeter of urban municipalities
2) For the case of a second home with an annual rental value of 60,000 DH located in the outlying areas of urban municipalities
Designation 1) Principal residence 2) Secondary residence
Annual rental value 60,000 DH 60,000 DH
Reduction of 75% 45,000 DH 0
Tax base 15,000 DH 60,000 DH
Rate to be applied 10.50% 6.50%
Tax Calculation 15,000 x 10.50% 60,000 x 6.50%
Tax payable 1,575 DH 3,900 DH
Obligations of owners
In the same way as the residence tax, the owners must make their declarations to the tax services to comply, in particular for the declaration of completion of a new construction, the declaration of change of ownership or assignment of good.
Payment deadline and sanctions
May 31 is the deadline for payment of the municipal services tax.
If you exceed the due date, you are liable to the following penalties:
A penalty of 10%
A 5% increase for the first month of delay
An increase of 0.50% per additional month or fraction of a month
Where to pay the municipal services tax?
The payment of the municipal services tax can be made:
At the collection indicated on the tax notice
With partner banks
Or online at www.tgr.gov.ma