Germany-Morocco Double Taxation: Guide for MRE in Germany

Yes, the 2015 convention brings several improvements over the 1972 one: 1) The dividend withholding rate for substantial shareholdings (> 25%) drops from 15% to 5%, benefiting MRE shareholders of Moroccan companies; 2) Interest rules are clarified with a maximum rate of 10% in the source state; 3) An information exchange clause compliant with OECD standards is introduced; 4) Strengthened anti-avoidance provisions combat artificial arrangements. The general structure remains similar to the previous convention.

No, under the 2015 Germany-Morocco convention (Article 6), real estate income from property in Morocco is taxable only in Morocco. Germany applies the exemption method (Freistellungsmethode): these rents are excluded from your German taxable base. However, they must still be mentioned in your return (AUS annex) for the potential progression calculation. In Morocco, rents are subject to income tax under progressive brackets (effective rate often between 10% and 30% after 40% allowance).

In ELSTER, here are the steps to declare Moroccan income: 1) Log in with your Steuer-ID and ELSTER password; 2) Create a new return (Einkommensteuererklärung) for the relevant year; 3) Add the Anlage AUS (foreign income) to the base form; 4) In the AUS, select Morocco as source country, enter the income category, gross amount in euros (convert at ECB rate), Moroccan tax paid; 5) ELSTER automatically calculates the admissible tax credit. Attach DGI receipts by scanning your documents.

The Anlage AUS (Ausländische Einkünfte und Anrechnungsbetrag) is the specific form in the German tax return for declaring foreign-source income and calculating the applicable tax credit. It replaces the specific boxes of other annexes (N, V, KAP) for income covered by a tax convention. For each source country, you enter: the income category, the double taxation elimination method provided by the convention (exemption or credit), gross and net amounts, and foreign taxes paid. This form is mandatory if you have Moroccan income.

Under the 2015 Germany-Morocco convention, pensions and annuities paid to a German tax resident are taxable in Germany. Your Moroccan CNSS pension must therefore be declared in your Einkommensteuererklärung. If the CNSS withholds Moroccan tax (which is rare for Moroccan non-residents), you can claim a tax credit. In practice, the CNSS generally pays pensions to non-residents without local withholding. German tax on your CNSS pension will be calculated at your German marginal rate (Einkommensteuer, up to 45% + Solidaritätszuschlag).

To justify your Moroccan income and taxes paid, keep: Moroccan DGI tax assessments (available at tax.gov.ma), Moroccan tax payment receipts, Moroccan bank statements showing rent or dividend transfers, rental contracts for your Moroccan properties, withholding tax certificates issued by Moroccan companies, and CNSS statements if you have a pension. These documents must be kept 10 years in Germany. In case of an audit (Betriebsprüfung), the Finanzamt may require a certified German translation.

Yes, the risk exists. Since 2019, Morocco participates in automatic tax information exchange (CRS - Common Reporting Standard) and Moroccan banking data of German residents is transmitted to the German Finanzamt. If an omission is detected, you risk: a tax surcharge (Nachzahlungszinsen: 1.8%/year since 2023), penalties for inaccurate filing (Steuerhinterziehung: fines and potentially prison). Voluntary disclosure (Selbstanzeige) before any official investigation eliminates criminal risk and reduces fines. It must be complete, accurate and include payment of tax owed.