Morocco 5% Rental Withholding from 1 July 2026: What MRE Landlords Need to Know
From 1 July 2026, rents paid to companies or to individuals under the net profit regime will be subject to a 5% withholding tax at source. For MRE landlords in Morocco, here is what changes in practice.
Morocco's 2026 Finance Law (Law No. 50-25) introduces a 5% withholding tax at source on rents paid to certain categories of landlords. The measure takes effect for rents allocated from 1 July 2026. For MRE landlords renting commercial property to a Moroccan business or professional, the impact on cash flow is immediate.
Who is affected by the withholding
The 5% withholding applies to rents paid to companies subject to corporate income tax and to individuals whose income is determined under the net actual profit or simplified net profit regime.
In practical terms, the withholding affects MRE who rent out a commercial space, office or warehouse to a Moroccan business, and MRE who have opted in or are required to use the net profit regime for their rental activity. MRE under the flat-rate regime for residential rental income are not directly affected: their residential rents continue to be processed under the standard rules.
How it works in practice
Before 1 July 2026, the corporate tenant pays 100% of the rent to the landlord. From 1 July 2026, the tenant withholds 5% of the gross rent, pays it directly to the Tax Administration (DGI) on behalf of the landlord, and remits the remaining 95% to the landlord.
The withheld amount is credited against the income tax due by the landlord at the annual filing. If the withholding exceeds the final tax owed (where the landlord has significant deductible expenses), the excess is refundable.
Cash flow impact on MRE landlords
For an MRE receiving MAD 10,000 per month in commercial rent, the net monthly amount drops from MAD 10,000 to MAD 9,500 starting 1 July 2026. The withheld MAD 500 is paid to the DGI in the landlord's name.
Over the year, this represents an advance of MAD 6,000 to the State before reconciliation at the IR filing in March of the following year. For a landlord financing work on the property or repaying a Moroccan mortgage from these rents, the cash flow effect is tangible.
What to do before 1 July
Three concrete actions are needed before the measure takes effect.
First, verify the current tenant's tax status. If it is a company (SARL, SA, SAS) or a professional under the net profit regime, the withholding will apply. If it is a private individual under the flat-rate regime, it will not.
Second, adjust financial flows. If the rent repays a loan or covers fixed expenses, anticipate the 5% drop in monthly cash flow.
Third, keep all withholding tax certificates that the tenant is required to provide to the landlord. Without these certificates, crediting the withholding at the IR filing will not be possible.
Alignment with the IR return
The annual rental income return must be filed with the DGI by 1 March of the following year. MRE can file online via the Damancom portal (damancom.ma).
Monthly 5% withholdings collected at source in 2026 will be credited against the final tax calculated under standard rules: 40% flat deduction on gross rent, progressive IR rate on the remaining 60%. If the cumulative withholding exceeds the tax owed, the excess is refunded.
For standard residential rentals
Residential rents paid by an individual tenant to a flat-rate MRE landlord are not affected by this 5% withholding. The MRE declares rental income as before and applies the 20% final-discharge rate if the annual rental income exceeds MAD 120,000, or the progressive IR scale otherwise.
The 5% withholding specifically targets professional rents and landlords under the net profit regime. This distinction is important to understand to avoid the misinterpretations circulating on social media.
Sources and references
The measure is set out in Article 73-III of the 2026 Finance Law (Law 50-25). The tax-news.ma portal publishes a comprehensive summary note of the 2026 tax measures. The DGI provides filing forms and payment methods on tax.gov.ma.
For MRE seeking to optimise their position, a consultation with a Moroccan certified accountant before 1 July helps set the strategy for 2026 and 2027.
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