The New Tax Regime for Exporting Companies

Prior to the Moroccan Finance Act 2020, exporting companies were granted the following tax benefits for their export sales:

• Total exemption from the Corporate Income Tax (CIT) for a period of 5 consecutive years starting from the financial year in which the first export transaction was carried out;
• and the application of the reduced CIT rate capped at 17.50% beyond this period.

The Finance Act 2020 amended the export tax system as follows:

• the removal of the abovementioned five-years exemption for export turnover ;
• and the increase in the capped corporate tax rate from 17.50% to 20%, in respect of export turnover.

Transitional measure: As a transitional measure, exporting companies having carried out their first export operation before January 1^st 2020 shall continue to benefit from the five-year exemption period until the expiry of the period of five consecutive years starting from the financial year during which their first export operation was carried out. Beyond this period, the said companies benefit for their export turnover from taxation at the rate of 20%. In this respect, it should be noted that companies carrying out their first export operation as from January 1^st 2020 do not benefit from the five-year exemption from corporation tax on their export turnover. Also, the new rate of 20% applies to fiscal years beginning on or after January 1^st 2020.   Legal references: Articles 6 (I- B - 1° and I- D- 3°) and 19 (I-A-1°) of the General Tax Code.   Written by Ali SALIM  Manager TAX