New measures in the General Instruction of the Office des Changes

This article is designed to inform you about The version 2022 theGeneral Instruction on Foreign Exchange Operations (IGOC) was published this January 3.

This version is obviously the result of taking into account the various expectations of economic players and foreign investors in particular, with the aim of having regulations that are able to preserve their competitiveness in an economy that is open at regional and international level.

In this newsflash, we'll be taking you through the main liberalization and easing measures, for both current and capital transactions. So what are the new measures in the General Instruction of the Moroccan Foreign Exchange Office?

1. Supporting and encouraging innovative new technology companies (start-ups)

  • Increase the e-commerce allocation to one million dirhams;
  • The opportunity to invest abroad

2. Easing the rules for managing foreign currency and convertible dirham accounts for exporters :

  • The possibility of paying for imports of goods and services in advance, or with an advance payment rate higher than the authorized ceiling.
  • The ability to pay by international credit card for all imports of services for the exporter's business needs.

3 Relaxing the rules governing imports of goods and services :

  • An e-commerce grant of up to 200,000 dirhams for Moroccan legal entities without foreign currency or convertible dirham accounts, enabling them to pay for imported services by international payment card.
  • 5 %'s flexibility when it comes to down-payment settlements means there's no blockage if the authorized down-payment rate is exceeded.
  • Simplification of import settlement procedures in line with changes in international trade practices.
  • As a result, the reporting requirements for economic operators have been abolished.

4. Revision of the provisions governing convertible term accounts :

  • The option of transferring the first tranche of 25 % immediately after the funds have been credited to the convertible term account.
  • Reducing the transfer period from four to three years.
  • Consolidation of the regime for foreign residents in Morocco

5. Consolidating and simplifying the rules governing endowments to individuals

  • The introduction of a global personal travel allowance of MAD 100,000 plus an additional allowance of 30 % of IR, capped at MAD 300,000 per calendar year and per person.
  • This endowment can be used for personal trips abroad of any kind (tourist, religious, medical, etc.).

Our legal and tax team will be happy to provide you with any further information you may require on a specific point relating to the Foreign Exchange Board 2022.

The accounting firm Fiscal & Légal Team can assist you in accounting, taxation and legal matters, for example:

Business start-ups ;
Bookkeeping
Social Expertise and HRM
Legal advice
Processing pay slips ;
Tax optimization;
Outsourcing accounting and tax returns ;
Digitization
Company support

Faithfully yours,

Ilham Taha-Bouamri
Chartered accountant and tax specialist

FLASH INFO: Main provisions of the 2022 Finance Act

This article has been written to take account of the main provisions of the Finance Act for 2022.

On December 20, the Finance Act for 2022 was published in Bulletin Officiel N° 7049 bis.

The Finance Act for 2022 has undergone a series of amendments. This note will focus on the main amendments relating to corporate and personal taxation.

1- Broadening the basis of application of the social solidarity contribution on profits for 2022:
Articles 11-IV, 267 to 273 of the General Tax Code

This contribution will apply to companies and individuals with professional or agricultural income determined according to the real net income system and whose net profit exceeds 1 million dirhams at the following rates:

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Companies permanently exempt from corporate income tax are excluded from the scope of this contribution.

This contribution has not been renewed for individuals holding :

Salary income
Profits and property income
Income and capital gains
It should be noted that one of the new features of the FLA 2022 is the application of CSS to companies benefiting from temporary exemptions.

This is the case for companies based in Casablanca Finance City and the Industrial Acceleration Zone.

2- Reduction in the marginal rate of corporate income tax from 28% to 26% for industrial companies with net income of less than MAD 100,000,000, in respect of their net income corresponding to their local sales:
Article 19-I-A of the C.G.I-9

Downward revision of the corporate income tax rate applicable to companies in the industrial sector with net income of less than MAD 100 million.

From now on, these companies will be subject to a corporate income tax rate of 26 % instead of 28 % in the past.

3- Eliminate progressive rates from the current corporate tax scale and adopt proportional rates to ensure convergence towards a unified rate;
The corporate income tax rates remain unchanged (see below), but instead of being progressive, they are now proportional.

[table id=3 /]

For example, for taxable income of 700,000 dirhams, the applicable corporate income tax rate will be 20 % on all taxable income, rather than 10 % for taxable income of 300,000 dirhams and 20 % for taxable income of 400,000 dirhams.

Net taxable profit on export sales is still taxed at the reduced rate of 20%.

4- Lowering the minimum contribution rate from 0.50% to 0.40%:
Article 144-I-D of the CGI

Article 144-I-D of the LF 2022 provides for a reduction in the minimum contribution rate from 0.50% to 0.40% for companies whose current income excluding depreciation is declared positive.

However, the rate of 0.60% remains applicable if current income excluding depreciation is in deficit for the last two consecutive years, beyond the exemption period during the first 3 years of operation.

The new measure applies to fiscal years beginning on or after January 1, 2022.

5- Adaptation and improvement of the Single Professional Contribution regime instituted by the 2021 Finance Act
Article 40-I of the CGI

The 2022 Finance Law provides for standardization of the Single Professional Contribution by reducing the number of occupational categories and coefficients used to determine the tax base. The number of occupational categories is now reduced to four (4):

commerce, services, manufacturing, trade and specific activities.

The 2022 Finance Act has revised the margin coefficients to be applied to each category of profession.

At the same time, it repealed the table annexed to the General Tax Code for determining the single business contribution system for income tax purposes, as set out in article 40.

From January 1, 2022, individuals whose professional income is determined under the CPU system will be subject to income tax as follows:

CPU = (Sales x Coefficient) x 10 % + additional fee
You will also find an article dedicated to the new "Contribution Professionnelle Unique" scheme...

6- Extension of the income tax (IR) exemption for income paid to employees for the first time until December 31, 2022.
Extension of the special income tax exemption scheme for newly-hired employees between January 1, 2021 and December 31, 2022.

This scheme, adopted as part of the 2021 Finance Act, was intended only for employees recruited during 2021.

At the end of this brief presentation of the main provisions of the Finance Act 2022, we note that it brings together all the pillars necessary for Covid 19's post-crisis economic recovery.

In addition to these main benefits, a number of other tax measures have also been introduced. These can be studied separately on a case-by-case basis, at the request of the interested party.

For further information on the 2022 Finance Act, our legal and tax team is at your disposal.

Faithfully yours

Ilham Taha-Bouamri
Chartered accountant and tax specialist

All you need to know about paid annual leave

* Annual leave
All employees are entitled to paid annual leave after 6 months' continuous service with the same company or employer, in accordance with Chapter IV of Title III of Book II of the French Labor Code.

Article 231 of the French Labor Code therefore provides that the number of days of monthly leave varies, after 6 months of continuous service, according to the following cases:

First, the calculation of days:
- 1 ½ days per month of actual work, i.e. (26 days or 191 hours) for employees aged 18 and over;

- 2 days per month for those under 18.

2- calculating annual leave: for example, the case of an employee over the age of 18
Annual leave is set at one and a half days' actual work per month of service, i.e. a maximum of 18 days' paid leave.

Consequently, to calculate these 18 days, we have to base ourselves on the CNSS declaration system.

The French Labor Code sets the working week at 44 hours, i.e. 8 hours a day from Monday to Friday and 4 hours on Saturday. Despite this, Saturday is still counted as a full day for CNSS declaration purposes, so cannot be declared (5.5 days). The same system is applied for vacation deductions.

The employee is therefore entitled to 18 working days per year of actual work (i.e. 3 weeks from Monday to Saturday 3 X 6 days = 18 days).

3- Obligation to take leave
Taking annual leave is compulsory. Most employers believe that leave can be replaced by a compensatory payment.

This is prohibited by article 242 of the Labour Code, which reads as follows:

"Any agreement relating to the prior renunciation of the right to paid annual leave or to the abandonment of said leave, even in exchange for the granting of a compensatory indemnity, is considered null and void."

However, paid annual leave may, by agreement between the employee and the employer, be split or accumulated over two consecutive years (article 240 of the French Labor Code).

4- Bonus for seniority leave :
Similarly, an additional 1 ½ days per year for every 5 years of continuous or discontinuous service, up to a maximum total leave of 30 working days.

5- Increase the duration of leave by as many days as there are paid days off (usually public holidays) during the leave.
Sick leave does not count as paid annual leave.

6- Period of actual work taken into account in calculating leave :

- Previous leave ;
- Advance notice;
- Military service;
- Absence due to illness or accident, duly certified ;
- The period before and after a woman gives birth;
- Periods of incapacity following an accident at work or occupational disease
- Periods of absence for family events, sports competitions or communal activities ;
- Authorized absences not exceeding 10 days/year
Last Periods of closure by judicial or administrative decision or due to force majeure.

7- Vacation pay :
This indemnity is due to any employee whose contract is terminated before he or she has benefited from the leave, and who can prove that he or she has at least 1 month's service. The indemnity is equal to 1 1/2 days per month worked, and is payable with the last salary.

Consequently, in the event of the employee's death, this indemnity will have to be paid in full to his or her spouse, for example, or to his or her descendants or ascendants.

Employees on fixed-term contracts must exhaust their leave before the contract expires.

8- Employment and work of an employee on leave :
It is then strictly forbidden to keep the employee busy during the leave, even outside the company.

It is also forbidden to employ a worker from another company while he or she is on leave.

The employee on leave is not able to perform paid work.

9- Leave for occupational injury or illness.
In conclusion, the leave of an employee who has suffered an accident at work is postponed until the injury has been consolidated.

So please don't hesitate to contact us if you have any questions you'd like us to answer or clarify.

The accounting firm Fiscal & Légal Team can also provide you with support and expertise in the fields of accounting, taxation and legal matters:

Business start-ups ;
Bookkeeping
Social Expertise and HRM
Legal advice
Processing pay slips ;
Tax optimization;
Outsourcing accounting and tax returns ;
Digitization
Direct debit
Company support


Faithfully yours,

Ilham Taha-Bouamri
Chartered accountant and tax specialist