Tax planning for a move to Morocco
Making the decision to move to Morocco is an exciting yet daunting one. As well as the fun task of finding a new home to live in, there will be several more serious issues to confront, and one of these is tax. If you do not find out exactly what sort of tax amount you should be paying then you could find that your budgeting for life in Morocco is not accurate. The last thing you want is to believe that you will be taxed a certain amount only to then find that you are taxed far more than what you were expecting.

The tax system in Morocco is largely based around the French tax system and it is quite complex, especially when it comes to tax paid on properties. If you are planning on buying to let, then you can expect to pay 44 per cent tax on 60 per cent of any rental income. In Tangier the tax is 50 per cent lower, at 22 per cent, making Tangier a haven for property investors. There is also a three-year exoneration, so you won’t have to pay tax for the first three years of owning a property in Morocco.

When you own a property in Morocco you will also be subject to tax after owning it for five years. The tax is paid yearly and will be based upon the hypothetical rental value per year for the property. This amount is 75 per cent less if the property is a holiday home or your permanent residence. Again, once you start paying this tax after five years, you will also be charged for a rubbish collection tax which is charged at 10 per cent of the property’s annual rental value.

There is a great deal of incentive for UK buyers to invest in Moroccan property including:

• 0 per cent tax on rental income for the first five years.

• If the gain is less than £40k then there is 0 per cent capital gains tax.

• If profit is over £40k there is 0 per cent capital gains tax after 10 years of ownership.

• 0 per cent inheritance tax when the property is passed on to a family member.

• 100 per cent repatriation of funds if you sell your property.

There is also a double taxation treaty between Morocco and the UK, meaning you will not be charged capital gains tax in both countries. When it comes to income tax in Morocco, everyone is subject to a progressive tax of between 13 per cent and 44 per cent, depending on their income. If your permanent residence is not in Morocco, then you are only taxed on the income you make from Morocco.

Tax is to be paid on all types of income; salary and wages, allowances, annuities, pensions, and all other benefits which come from your employment, such as bonuses. There is substantial discount on tax paid on pensions from abroad