Morocco Corporate Tax Rate in 2026: The Two-Rate System
What is the corporate tax rate in Morocco in 2026? The 2023 Finance Law reformed the IS system to two flat rates: 20% (standard) and 35% (large companies and banks). Full guide.
Morocco's New Two-Tier Corporate Tax System
Morocco's corporate income tax (Impôt sur les Sociétés, or IS) underwent a major reform through the 2023 Finance Law. The reform replaced the previous progressive bracket system with a simplified two-rate structure, implemented gradually between 2023 and 2026.
As of 2026, two rates apply: a standard rate of **20%** for companies with net taxable profit up to MAD 100 million, and a higher rate of **35%** for companies with net taxable profit exceeding MAD 100 million. Financial institutions — banks, insurance companies, leasing companies and credit institutions — also apply the 35% rate regardless of their profit level.
The Old Progressive Tax System
Before the 2023 reform, Morocco's corporate tax was calculated using a progressive bracket system. Small businesses with profits below MAD 300,000 were taxed at 10%. Mid-sized companies paid 20% up to MAD 1 million in profit, and 31% beyond that. Banks and insurers faced a higher specific rate of 37%.
This complexity created administrative burden and sectoral distortions. The reform aims to make Morocco's tax system more readable and competitive for both domestic and foreign investors — aligning the country with international norms as measured by indices like Doing Business and Paying Taxes.
The MAD 100 Million Threshold
The MAD 100 million net taxable profit threshold is the central dividing line of the new system. Companies below this threshold apply 20% on their entire taxable profit. Companies above it apply 35% on their entire taxable profit — not just on the excess above MAD 100 million.
This creates a notable cliff effect: a company with MAD 99 million in profit pays MAD 19.8 million in corporate tax, while a company with MAD 101 million pays MAD 35.35 million. This non-linearity must be considered in financial planning and M&A valuations of Moroccan companies approaching this threshold.
Who Pays 35%?
Beyond companies with profits exceeding MAD 100 million, the 35% rate applies by statute to: commercial banks and credit institutions, insurance and reinsurance companies, leasing companies (crédit-bail), and microcredit associations.
This means that Morocco's entire financial sector — which makes up a significant share of the Casablanca Stock Exchange's market capitalization — operates under the 35% corporate tax rate. Analyzing Moroccan banks or insurers requires accounting for this higher tax burden when modeling net earnings and distributable profits.
Transition Period and Annual Adjustments
The convergence to the two-rate system was not immediate in 2023. Each annual Finance Law introduces a step in the convergence, moving rates gradually toward 20% and 35% to avoid abrupt fiscal shocks. Companies that previously enjoyed a 10% rate see it increase progressively; banks that paid 37% see it decrease toward 35%.
By 2026, the transition is complete and the system is fully in place with only two rates. This phased approach was designed to give businesses time to adapt their financial projections, investment plans, and dividend policies to the new reality.
Corporate Tax and Investment Analysis
Understanding Morocco's corporate tax rate is fundamental to any investment analysis involving Moroccan companies. The effective tax rate directly determines net distributable profit, return on equity (ROE), and dividend capacity.
SYNTA-IQ provides access to the financial statements of Moroccan companies as filed with the OMPIC business registry. Analysts can review balance sheets, income statements (CPC), and derive effective tax rates and profitability ratios for comparative analysis across companies and sectors.
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