Annual global income return : obligation, exemptions and deductions

Definition

What this is about

The annual global income return informs the tax authorities of the previous year's income, stating the categories of which it is composed art. 82-I GTC. There are six such categories: business income, agricultural income, employment and equivalent income, rental income and property capital gains, income and gains from securities, other income and gains art. 22 GTC.

Taxable global income consists of the net income in those categories, excluding income and gains taxed at a final flat rate art. 25 GTC. Each net income figure is determined separately, in accordance with the rules specific to its category: the return is therefore not an addition of amounts received.

Scope

Who is concerned

• Individuals whose tax domicile is in Morocco, in respect of their Moroccan-source and foreign-source income and gains.
• Individuals whose tax domicile is not in Morocco, in respect of their Moroccan-source income and gains.
• Persons, domiciled in Morocco or not, whose right to tax the income is allocated to Morocco by a double taxation treaty.

These three categories of taxable persons are those of article 23-I. Tax domicile in Morocco results from three alternative tests: a permanent home, the centre of economic interests, or a period of stay, continuous or not, exceeding 183 days in any 365-day period art. 23 GTC. State officials on assignment abroad who are exempt from personal tax in their country of residence are deemed domiciled in Morocco.

Five categories are exempt from filing, subject to the reservation noted above art. 86 GTC: employees paid by a single employer or annuity payer domiciled in Morocco and required to operate the withholding; holders of income subject to final flat rates; holders of supplementary retirement pensions paid by several Moroccan annuity payers, whose total net taxable amount does not exceed the exempt band; landlords who have opted, under the conditions of article 64-IV, for their rental income to be taxed at the final flat rate of 20 % under article 73-II-F-12°, as regards the portion so taxed; holders of exempt pensions and life annuities only.

Applicable rules

Scale, deductions and reliefs

The scale exempts the band up to 40,000 dirhams, then applies 10 % from 40,001 to 60,000, 20 % from 60,001 to 80,000, 30 % from 80,001 to 100,000, 34 % from 100,001 to 180,000 and 37 % on the excess art. 73-I GTC.

Three deductions are made against taxable global income itself art. 28 GTC. Gifts in cash or in kind made to the bodies referred to in article 10-I-B-2° are deductible in full. Within a limit of 10 % of taxable global income, the following are also deductible, for the acquisition or construction of a dwelling used as a principal residence: loan interest, the remuneration agreed in advance under a "Mourabaha" contract, or the rental margin under an "Ijara Mountahia Bitamlik" contract. In the case of construction, the deduction is limited to seven years from the issue of the building permit.

Within the same 10 % limit, premiums under retirement insurance contracts of at least eight years, taken out with insurance companies established in Morocco and whose benefits are paid from the age of 45 onwards, are deductible art. 28-III-A. A taxpayer with employment income only may deduct them within a limit of 50 % of their net taxable salary received on a regular basis; a taxpayer with mixed income chooses between the two limits.

Finally comes the family relief: 600 dirhams per dependant, with a total that may not exceed 3,600 dirhams art. 74-I GTC, amounts set by the finance act for 2026 and applicable to income earned from 1 January 2026. Dependants comprise the spouse and the children, subject to conditions of age and of their own income.

Deadlines and limitation periods

The timeline

1. Before 1 March

   Filing of the previous year's global income return, for holders of income other than business income art. 82-I. The tax due is paid spontaneously within the same period art. 173-I.

2. Before 1 May

   The same return, for holders of business income determined under the actual net income or simplified net income regime.

3. Until 31 December of the 4^th year

   Period for correcting understatements, errors and omissions, running from the year in which the income was earned art. 232-I-a; omissions arising from a return that was never filed fall under point b) of the same article.

4. Beyond that, up to ten years

   For years never declared, the tax, penalty and surcharges are payable in full even if the limitation period has expired art. 232-VIII-15°.

The limitation period is interrupted by audit notifications and suspended during appeals art. 232-V and VI.

Documents and supporting evidence

The elements of the file

The file rests on the following elements:

• Identification details: address of the tax domicile or of the main establishment, nature of the occupations carried on, national identity card or foreign national's card, tax identifier and municipal services tax article number for the habitual residence art. 82-I.
• The elements specific to each category: for rental income, the identity of each tenant, the location and description of the property, and the gross and net amounts.
• Evidence of the withholdings suffered: the amount taxed, the amount withheld, the period concerned, and the identity and tax identifier of the person required to operate it.
• The documents the code requires for the deductions: article 28-II makes the housing deduction conditional, for employees taxed by withholding at source, on the monthly deduction and payment of the repayments by the employer to the lending institutions and, for other taxpayers, on a certified copy of the loan, "Mourabaha" or "Ijara Mountahia Bitamlik" contract and on the receipts or debit advices attached to the return art. 28-II; retirement insurance calls for a certified copy of the contract and a payment certificate stating the election for deductibility art. 28-III-A.

This list is indicative; the exact composition of the file depends on the circumstances.

Points requiring attention

What can cause a file to fail