Income Tax and Withholding Tax on Moroccan Salaries for Non-Resident MRE

You pay taxes in both countries, unless the France-Morocco convention allows you to avoid double taxation. In principle: your Moroccan employer withholds Moroccan income tax at source (0% to 38% depending on your salary). In France, if you are a French tax resident, you must also declare this Moroccan salary in your French return and pay French tax, but you benefit from a tax credit equal to the Moroccan IR already paid. The practical result: you pay the highest rate of the two countries, not the sum of both.

The 20% flat tax rate is an option introduced by Finance Law 2025 allowing non-residents receiving more than MAD 120,000/year in Moroccan income to pay a flat 20% tax that is fully discharging of any other Moroccan taxation on that income. It is advantageous when your progressive marginal rate exceeds 20%, i.e. from the moment your Moroccan income exceeds about MAD 60,000/year (30% bracket). For a salary of MAD 200,000/year, the 20% flat rate = MAD 40,000 tax vs progressive rate ≈ MAD 60,000. Saving: MAD 20,000. The option is exercised with the employer or the DGI.

To obtain a French tax residency certificate, go to impots.gouv.fr in your personal area, section "Gérer mon profil" then "Certificats". You can also request it by filling out cerfa form n°5000 (for conventional use) or n°5001 (general use) and sending it to your Service des Impôts des Particuliers (SIP). The document is issued within 1 to 3 weeks, free of charge. It is valid for the year mentioned on the certificate. This document officially certifies that you are taxable in France by virtue of your tax residency.

Yes, if you are a French tax resident. Dividends from a Moroccan company are subject to withholding tax in Morocco (15%, or 7.5% if reinvested). They must then be declared in France where they will be subject to the PFU (Flat Tax) of 30% (12.8% IR + 17.2% social charges) or the progressive scale on option. The Moroccan withholding entitles you to a tax credit in France, capped according to the France-Morocco convention (generally equal to the conventional withholding rate of 15%). You therefore do not pay 15% twice, but overall about 30% on your Moroccan dividends.

Withholding tax is a mechanism by which tax is deducted directly from income before it is paid to the recipient. It is the payer (employer, company, bank) who is responsible for calculating, withholding and remitting the tax to the Moroccan DGI on behalf of the recipient. For example: your Moroccan employer calculates your monthly IR according to the brackets, deducts it from your gross salary and pays the net amount into your account. You therefore receive a net salary, the tax having already been paid. For dividends, it is the Moroccan company that withholds 15% before paying you your dividend.

Yes, several tax benefits exist for MRE investors: 1) IR exemption on interest from MDM accounts (Moroccans of the World accounts); 2) Dividends at the reduced rate of 7.5% if reinvested in the distributing company; 3) Exemption from capital gains tax on real estate if the property was the main residence for more than 6 years; 4) Benefits in free zones (Tanger Med, CFC Casablanca) for companies; 5) Customs duty exemption on certain equipment imported as part of an investment project. The 2022 Moroccan Investment Code also strengthened incentives for MRE entrepreneurs.

This depends on the France-Morocco tax convention and the nature of the income. For Moroccan-source salaries (Moroccan employer) declared in France: yes, Moroccan IR withheld at source gives entitlement to a tax credit in France, capped at the corresponding French tax. This credit is mentioned in your French return via form 2047. For Moroccan dividends: tax credit capped at the conventional rate (15%). For Moroccan rents: Moroccan taxes on rents generally give entitlement to a tax credit in France. This is not a deduction (which would reduce the base) but a credit (which directly reduces tax owed).