Canada-Morocco Tax Convention (1975): MRE Guide 2026

Canada and Morocco are bound by a convention for the avoidance of double taxation, signed at Ottawa on 22 December 1975. It allocates the right to tax certain income and caps withholding taxes, but it does not remove every difficulty for MRE residing in Canada (Montreal, Toronto): their Moroccan income (rents, dividends, CNSS pension) must be declared in Canada, and a risk of double taxation remains if the steps are not completed. This guide explains the protection mechanisms, notably the convention and the Canadian foreign tax credit, and the essential steps to take.

Costs & fees

International tax specialist accountant	Check with the professional	To apply the 1975 convention and Canadian rules together
T1 return with foreign income	Check with the professional	Accountant service to complete T2209 and T1135
T1135 form (specified foreign property costing more than CAD 100,000)	Separate form, filed on the same date as the return	Penalties apply for failure to file (CRA penalties page)
CRA penalties for omissions	Check with the CRA	Plus compound interest at prescribed rate

Timeline

Check with the bodies concerned

Gather Moroccan documentsDGI receipts, bank statements, CNSS certificates

Depends on your situation

Prepare T1 returnWith T2209 and T1135 forms if applicable

By April 30

File returnDeadline varies by taxpayer category (CRA)

Check with the CRA

CRA processingTo receive Notice of Assessment

Check with the CRA

Potential refundIf tax credit generates overpayment

Identify All Moroccan Income and Taxes Paid

Before starting your Canadian return, list all your income from Moroccan sources: rents received (after deductions in Morocco), dividends from Moroccan companies, CNSS pension or retirement from a Moroccan employer, interest on Moroccan bank accounts, capital gains on real estate sales. For each category, note the gross amount, net amount after withholdings, and Moroccan taxes actually paid. This information is needed to calculate your foreign tax credit in Canada. Download your tax certificates from tax.gov.ma.

⚠️ Warning: Even with the 1975 convention, you cannot assume your Moroccan income is exempt in Canada: all must be declared.

Declare This Income in the Canadian Tax Return (T1)

As a Canadian tax resident, you must declare your worldwide income in your T1 return (Income Tax and Benefit Return). Foreign income is reported according to its nature: foreign rents go in the rental income schedule, foreign dividends and interest in the corresponding boxes. Amounts must be converted to CAD following CRA guidance.

⚠️ Warning: Failing to declare foreign income exposes you to CRA penalties.

Calculate and Claim the Foreign Tax Credit (Form T2209)

Canada grants a foreign tax credit for taxes paid abroad, and Article XXII of the Canada-Morocco convention provides that Moroccan tax on Moroccan-source income is deducted from Canadian tax payable on the same income, under the conditions it sets. This credit is claimed via form T2209 (Federal Foreign Tax Credits). It is calculated separately for business income and non-business income. For passive income (rents, dividends, interest), use the non-business income section. The credit is capped at Canadian federal tax on the same foreign income. A similar provincial credit also exists.

⚠️ Warning: The credit cannot exceed Canadian tax calculated on foreign income.

Complete Form T1135 if the Cost of Foreign Property Exceeds CAD 100,000

The Canada Revenue Agency requires Canadian residents (individuals, corporations and certain trusts) who, at any time during the year, own specified foreign property costing more than CAD 100,000 to complete form T1135 (Foreign Income Verification Statement). Moroccan assets covered include: bank accounts in Morocco, real estate, investments, shares in Moroccan companies. This form is separate from the T1 return and must be submitted at the same deadline. Significant penalties apply for failure to file or late filing.

⚠️ Warning: The property to be reported is defined by the CRA (specified foreign property): see the CRA page on the Foreign Income Verification Statement.

Other Canadian Rules on Foreign Income

The 1975 Canada-Morocco convention applies alongside Canadian rules on foreign income. Canadian rules on foreign income, transfer pricing, and FAPI (Foreign Accrual Property Income) rules may apply to certain structures for holding Moroccan assets.

In depth

The tax convention between Canada and Morocco was signed at Ottawa on 22 December 1975. It caps withholding tax at 15 percent on dividends and on interest, and at 5 percent (copyright royalties) or 10 percent (other cases) on royalties; its text is published on the Department of Finance Canada website, for information only and without official value. Despite the convention, MRE in Canada remain exposed to a risk of double taxation on their passive Moroccan income (rents, dividends, interest). The Canadian foreign tax credit mechanism (T2209) mitigates this risk but does not eliminate it completely: notably because the credit is capped at Canadian tax on foreign income. Canadian FAPI rules may also apply in certain situations where a MRE holds a non-resident Moroccan company: in this case, certain passive income of the Moroccan company may be attributed directly to the Canadian MRE, even without distribution. Articles X (dividends), XI (interest), XII (royalties) and XXII (elimination of double taxation) of the convention can be read on the Department of Finance Canada website.

❌ Common mistakes to avoid

✕Believing the Canada-Morocco convention removes the need to declare Moroccan income in Canada
✕Forgetting the T1135 form when the cost of specified foreign property exceeds CAD 100,000
✕Not claiming the T2209 tax credit and paying taxes twice
✕Not converting Moroccan income to CAD correctly

🔗 Official links and resources

Canada Revenue Agency (CRA)

Canadian federal tax administration

Form T2209 - Federal Foreign Tax Credits

Form to claim foreign tax credit

Form T1135 - Foreign Income Verification

Declaration of specified foreign property costing more than CAD 100,000

DGI Morocco

Moroccan General Tax Directorate

❓ Frequently asked questions

Is there a tax convention between Canada and Morocco?＋

Yes. A convention for the avoidance of double taxation was signed at Ottawa on 22 December 1975. It caps withholding tax at 15 percent on dividends and on interest, and at 5 percent (copyright royalties) or 10 percent (other cases) on royalties. On the Canadian side, Article XXII provides for the deduction of Moroccan tax from Canadian tax payable on the same income, under the conditions it sets. The text is published on the Department of Finance Canada website (Morocco page, tax treaties), for information only and without official value. The Canadian foreign tax credit (form T2209) remains the form used to claim this credit.

Will I really pay taxes twice?＋

Not necessarily. Thanks to the Canadian foreign tax credit (form T2209), you can deduct from your Canadian tax the taxes legally paid in Morocco on the same income. In practice, the Moroccan income tax paid on your rents is deducted from your Canadian tax on those same rents, within the limits of the credit. The risk of actual double taxation is therefore limited, but you must complete the required steps (T1 return, T2209 form) to benefit from this credit.

What is the Canadian foreign tax credit and how does it work?＋

The Foreign Tax Credit is a mechanism in Canadian tax law allowing deduction from federal (and provincial) tax of taxes paid abroad on income also taxable in Canada. It is claimed via form T2209 for the federal credit. The credit is capped at the lesser of: (a) foreign tax paid, or (b) Canadian tax calculated on that foreign income. Example: Moroccan net rents CAD 10,000, Moroccan tax paid CAD 800, Canadian tax on those rents CAD 2,000 = credit of CAD 800.

Are my Moroccan rents taxable in Canada?＋

Yes, as a Canadian tax resident, your Moroccan rents are taxable in Canada (federal + provincial tax). You must declare them in your T1 after deducting allowable expenses (Moroccan taxes, management fees, depreciation). Net income is subject to your Canadian marginal rate. However, thanks to the T2209 credit, Moroccan taxes already paid on these rents will be deducted from Canadian tax, limiting the double taxation effect.

What is Form T1135?＋

Form T1135 (Foreign Income Verification Statement) is a mandatory declaration for Canadian residents who own, at any point during the year, specified foreign property costing more than CAD 100,000. The property to be reported is defined by the CRA. Significant penalties apply for failure to file.

How do I prove taxes paid in Morocco to the CRA?＋

The Canada Revenue Agency accepts the following documents as proof of foreign taxes paid: official DGI receipts or acknowledgments (downloadable from tax.gov.ma), Moroccan tax assessments, bank statements showing Moroccan tax debits, official tax certificates.

Where can I read the text of the Canada-Morocco convention?＋

The text of the convention, signed at Ottawa on 22 December 1975, is published on the Department of Finance Canada website: https://www.canada.ca/en/department-finance/programs/tax-policy/tax-treaties/country/morocco-convention-1975.html. This online version is given for information only and has no official value. The withholding rates (Articles X, XI and XII) and the rules for eliminating double taxation (Article XXII) can be read there article by article.

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Canada-Morocco Tax Convention: What It Provides and Steps for MRE in Canada