A new year, a new update to the finance law! While I won’t cover every change, I’ll at least cover those affecting freelancers and remote workers. The first change affecting us is the proportional IS (Import sur la Société).
Before, this tax was progressive. And it’s better explained via an example:
| Benefits (MAD) | IS |
|---|---|
| Less than 300.000 | 10% |
| Between 300.001 & 1.000.000 | 20% |
| More than 1.000.000 | 31% |
If you made 700.000 for example, you’ll pay 10% on the first 300.000 MAD and then 20% on the remaining 400.000. A total of 110.000 MAD in IS taxes.
This is the progressive way of doing it. Now to the proportional way.
The same numbers apply, but now, the rate is on the whole amount, so it’s 20% on the whole 700.000 MAD. This means as soon as you move to one tier, the rate applies to everything. With this in mind, the new total is 140.000 MAD in IS taxes.
It’s worth noting that companies exporting services (like freelancers and remote workers) will stay capped at 20% even if they make more than 1 million MAD. This is an incentive to companies bringing USD/EUR to Morocco.
This change will affect every professional working remotely, so make sure you plan accordingly and remember to optimize your taxes! If you need help with that, check our e-book makeitlegal.ma.