Rental Withholding Tax in Morocco: 2026 Guide

Rental withholding tax in Morocco applies to certain property income paid to an individual by a professional tenant. In practice, Morocco rental withholding tax is based primarily on Articles 61 to 65 of the General Tax Code for the classification of property income, Article 73 for the rate, and Article 160 bis for the obligation to withhold and remit the tax. The General Tax Code was established by Article 5 of Finance Law No. 43-06 for 2007. Its consolidated 2026 version published by the DGI must always be used.

The regime applicable since January 1, 2023 must not be confused with the regime for 2019 to 2022. An individual’s net property income is once again, in principle, included in total income subject to the progressive income tax scale. Article 64 of the General Tax Code provides for a standard 40% allowance to determine that net income. This allowance is applied by the landlord when calculating annual tax liability; the tenant does not use it to reduce the gross basis for the 10% withholding.

The withholding is, in principle, an advance payment creditable against the income tax ultimately owed by the owner. However, it would be excessive to state categorically that it is never final below 120,000 dirhams: Article 73, the landlord’s circumstances, and administrative guidance must be read together. The DGI circular commenting on the 2023 Finance Law documents the change in regime and must be checked alongside any subsequently published instructions. For an earlier period, the law in force during the year concerned naturally applies, rather than only the 2026 rules.

The threshold of 120,000 dirhams came from the earlier regime, which used proportional rates of 10% and 15%. Since the reform, that threshold alone is therefore insufficient to conclude that the withholding fully and finally settles the landlord’s tax. The landlord must verify the filing obligation, calculate net property income, and reconcile certified withholdings against total income tax. Where there is an excess, a refund may be requested under the applicable tax rules, but reimbursement is not automatic.

Successive finance laws may amend the general income tax scale, electronic filing requirements, or certain penalties without fully rewriting the property income withholding rules. Before making a payment or regularization, the consolidated 2026 General Tax Code, the DGI annual circular, and any administrative responses concerning the landlord must be compared. Care should be taken with references found online: the specific obligation relating to rent is governed by Article 160 bis. Articles dealing with other withholdings cannot automatically be applied to property income.

The rate applicable to property income subject to the withholding provided for by Article 160 bis is, in principle, 10%, in accordance with Article 73 of the General Tax Code applicable in 2026. The basis is the taxable gross property income paid or made available to the owner. The tenant does not deduct the 40% allowance before withholding. For monthly rent excluding tax of 10,000 dirhams, the withholding is therefore 1,000 dirhams, and the amount paid to the landlord is normally 9,000 dirhams.

Where the lease provides for lawfully invoiced VAT, the calculation must separate the rent excluding tax from the tax collected for the Treasury. Property income withholding must not be applied mechanically to a total amount that includes VAT. Recharged expenses require the same caution: the exact reimbursement of a documented expense is not necessarily treated as additional rent, whereas a permanent lump sum without an accounting may be linked to rental remuneration. The lease and invoices must be read together.

Since 2023, the annual threshold of 120,000 dirhams no longer makes it possible, in principle, to classify the withholding automatically as final. The system generally combines a 10% withholding on the gross amount with an annual calculation of the owner’s income tax. For that calculation, net property income is determined after the 40% allowance and then included in total taxable income. Withholdings actually remitted and substantiated are then deducted. This analysis must nevertheless be compared with the DGI circular on the 2023 Finance Law and any subsequent guidance.

Consider annual gross rent of 120,000 dirhams. The tenant withholds 12,000 dirhams over the year unless the landlord has validly opted for voluntary payment. For the owner’s tax return, net property income is, in principle, 72,000 dirhams after the 40% allowance and before the application of other tax rules. The final amount of income tax cannot be calculated from the rent alone: salaries, pensions, professional income, allowable expenses, and the overall tax position may change the balance payable or the excess to be refunded.

If the agreement provides that the owner must receive “net-of-tax” rent of 10,000 dirhams, the economic burden of the withholding may fall on the tenant. The gross-up calculation is then 10,000 divided by 90%, resulting in a gross amount of 11,111.11 dirhams and withholding of 1,111.11 dirhams. This clause cannot be enforced against the DGI to eliminate the tax. It only governs the financial relationship between the parties. Its wording must specify whether the stated amount is gross, net of withholding, excluding tax, or inclusive of all taxes.

The tenant begins by collecting the landlord’s full name, address, national identity card number if the landlord is an individual, tax identification number, and the property details. The tenant then reviews the lease, amendments, receipts, rent adjustments, and whether an option for voluntary payment exists. This review must take place before payment. A business that pays 100% of the rent before discovering its obligation will often have to advance the withholding tax itself and then seek reimbursement from the property owner.

The return and payment are normally made through the SIMPL online services accessible from tax.gov.ma. In its business account, the taxpayer locates the section for withholding tax returns and payments, followed by the service relating to property income. The name and computer code of the form may change; they must therefore be confirmed on the DGI portal or with the tax collection office. The return specifies the period, gross income, beneficiary, and amount withheld before the online payment is validated.

Article 160 bis requires payment within the month following the month in which the tax was withheld. In practical terms, tax withheld from rent paid in January must be reported and paid before the end of February, subject to the rules applied when the deadline falls on a non-working day. It is preferable not to wait until the final day, especially where the transfer requires several signatures. The electronic acknowledgment should be archived only after the final status of the bank payment has been verified.

The tenant must also comply with the summary reporting obligation provided for by the CGI, generally before March 1 of the following year for the relevant annual statement, subject to the official schedule for the tax year. This statement identifies each property owner, the gross amounts paid, and the withholding tax deducted. It replaces neither periodic returns nor due monthly payments. An accurate annual return therefore does not eliminate accumulated delays relating to previous deadlines. The DGI schedule for the relevant year must be checked before filing.

After each payment, the business retains the filing acknowledgment, online payment notice, bank statement, and beneficiary-by-beneficiary breakdown. It provides the property owner with a certificate corresponding to the amounts actually paid to the Treasury. The file must also contain the registered lease where registration is required, amendments, the landlord’s CIN or corporate documents, tax identification number, and evidence supporting any option. The DGI does not normally charge a filing fee for the return itself; any costs arise from the accountant, adviser, or bank.

The property owner must request an annual certificate and verify that it corresponds to the rent actually received. In the tax return, the owner determines the property income in accordance with Articles 64 and 82 ter of the CGI, then credits duly substantiated withholding tax. If the advance payments exceed the tax ultimately due, a refund request may be submitted under the conditions of Article 236. No filing fee is normally charged for this request, but the refund is not immediate: the DGI may audit the return, receipts, certificates, and the tenant’s payments.

If the tenant has reduced the rent by 10% without paying that amount to the Treasury, the landlord sends the tenant a written formal notice requesting the certificate and proof of tax payment. The landlord must not credit fictitious withholding tax based solely on a receipt. Depending on the case, the landlord may inform the DGI and bring a contractual action before the competent court. Articles 230 and 231 of the Dahir forming the Code of Obligations and Contracts govern the binding force of contracts and performance in good faith; Article 264 is the relevant reference for contractual damages.

For a société civile immobilière, the designation “SCI” does not determine the tax treatment. It is necessary to establish whether the entity is subject to corporate income tax or whether the income is taxed in the hands of individuals based on its organization and the options exercised. Its articles of association, tax identification number, previous returns, and a tax certificate must be reviewed. A tenant should never allocate the withholding tax among the shareholders solely on the basis of their contributions. The beneficiaries and their ownership interests must be established through consistent legal and tax documents.

A Moroccan residing abroad generally remains taxable in Morocco on income from property located in Morocco, subject to the applicable tax treaty. The Franco-Moroccan treaty for the elimination of double taxation, signed on May 29, 1970 and published in the Moroccan Official Gazette following ratification, provides in substance for property income to be taxed in the State where the property is located. Its publication reference and any amendments must be checked in the Official Gazette and the DGI’s tax treaties section before handling a Franco-Moroccan case.

Domestic withholding tax may therefore remain applicable where the property owner is an MRE and the tenant falls within Article 160 bis. The landlord retains the certificates for the Moroccan tax return and to claim, in the State of residence, the tax credit or double-taxation relief mechanism provided for by the applicable treaty. The existence of a permanent establishment, tax residence evidenced by a certificate, and the exact classification of the income must also be verified. A tax treaty allocates taxing rights; it does not automatically waive Moroccan formalities.

Subletting generates income whose classification depends on the contract, the sublessor’s status, and the services provided. A furnished rental accompanied by services similar to professional accommodation may constitute professional rather than property income. Uploading the lease to a platform or signing it electronically does not change this classification: the identity of the parties, the integrity of the document, and proof of payment remain decisive. The authorization to sublet, applicable registration formalities, and implications for VAT or business tax must also be verified.