This note summarizes tax regimes that may be applicable to persons who intends to stars their own project as independent entrepreneurs, so that transactions happen in a tax safe environment. There are basically 3 options:
- Simplified self-entrepreneur regime;
- Individual registration with taxes (Patente);
- Creation of company;
1- Simplified self-entrepreneur regime (régime de l’auto entrepreneur)
The person registered under the simplified self-employment regime is recognized by the tax authorities, according to Law No. 114.13. This person can establish invoices for the benefit of his clients. The invoiced amounts are excluding VAT.
Condition: annual turnover less than 200,000 MAD mad and activity to be within the permitted listed
Taxation : 1% of turnover
Reporting formality : submitting a sales report file
Other : simplified registration and cancellation procedure, exemption from accounting formality, no need for domicilium or rental.
2- Professionnal registered activity as an individual
The independent entrepreneur may obtain a tax registration called “patent” (numéro de taxe professionnelle) and perform his professional activity. Under this regime, he can establish invoices to his clients.
Taxation at independent entrepreneur’s end:
- Taxable income subject to personal income tax under progressive rate (up to 38%) with a minimum contribution of 0.5% of the turnover (this contribution can not be less than 3000 Mad)
- Minimum patent of 3000 Mad (after 5 years of exemption)
- VAT of 20% on the gross amount invoiced . this VAT is recoverable by the client under common law conditions.
Reporting formality at independent entrepreneur’s end:
- Annual personal income tax return accompanied with the balance sheet of the professional activity;
- Quarterly VAT returns;
- Patent annual report;
3- Creation of a sole shareholder company
The independent entrepreneur may establish a private sole shareholder limited liability company and proceed to the invoicing of services performed to his clients.
Taxation:
Taxable benefit subject to corporate income tax under proportional rate here after with a minimum contribution of 0.5% of the turnover (this contribution cannot be less than 3000 Mad)
| Pre Tax fiscal result |
CIT Rate |
| Less than 300 000 |
10% |
| From 300 001 to 1 000 000 |
20% |
| Higher than 1 000 000 |
31% |
- Taxation of 15% of the gross amount of dividends paid
- Minimum patent of 3000 Mad (after 5 years of exemption)
- VAT of 20% on the gross amount invoiced. This VAT is recoverable by the client under common law conditions.
Reporting formality at independent entrepreneur’s end:
- Financial statements to be accompanied by annual tax returns (tax benefit return, dividends return, ..)
- Financial statement and minutes of annual assembly to be submitted to the commercial court
- Quarterly VAT returns
- Patent annual report
Other: difficult process to shut down the company if needed to
Written by Imane BENABOUD TAX Manager
