Leaving Morocco or death : the article 85 return

Definition

What this covers

Article 85 establishes an early or deferred global income return, which replaces the annual deadline in two situations the code treats together : the taxpayer who ceases to have their tax domicile in Morocco, and the deceased taxpayer, whose return is filed by their beneficiaries art. 85 GTC.

The taxable matter is fixed at the date of the event. On cessation, the taxable global income for the year comprises Moroccan-source income relating to that year and foreign-source income acquired at the date of cessation art. 27-II GTC. On death, the tax is assessed on the global income acquired from 1 January to the date of death and, where applicable, on that of the preceding year art. 175-I GTC.

Scope

Who is concerned

• Any individual who ceases to have their tax domicile in Morocco, whatever their nationality.
• The beneficiaries of a deceased taxpayer, required to file the deceased's global income return.
• Beneficiaries who continue the activities of the deceased taxpayer, to whom the code opens two options of their own.
• Taxpayers under the single professional contribution regime, for whom the article 82 quater return replaces the global income return.

Cessation of tax domicile is assessed against the three alternative criteria of article 23-II : a permanent home, the centre of economic interests, and a continuous or discontinuous stay exceeding 183 days in any 365-day period. So long as one of them remains satisfied, Moroccan tax domicile subsists.

Applicable rules

The regime for each situation

On departure, the global income return — or that of article 82 quater — is due no later than thirty days before the date of departure, for the period provided for by article 27-II art. 85-I GTC. The tax due on that basis is paid spontaneously within the period allowed for that return art. 173-I GTC ; failing that, it is placed in collection by tax roll and, the taxpayer having ceased to have their tax domicile or principal place of business in Morocco, then becomes immediately due in full art. 175-I GTC.

On death, the beneficiaries have the three months following the death in which to file the deceased's return, for the period provided for by article 175-I art. 85-II GTC. Where they continue the deceased's activities, the code opens two options to them, to be requested before expiry of that same period :

• Treatment as a de facto company : that the joint ownership arising on the death be regarded as a de facto company ; no adjustment is then required in respect of the capital gains relating to assets used in a professional business, an inventory of which is attached to the request.
• Deferral of filing : that the deceased's return for the final period of activity be filed only within the period of article 82 or of article 82 quater.

Family relief is applied according to the particulars set out in the returns of articles 82 and 85 art. 75 GTC.

Deadlines and limitation

The timetable

1. Thirty days before departure

   Deadline for the return on cessation of tax domicile art. 85-I. The period is counted backwards from the date of departure, not forwards from it.

2. On cessation

   Failing spontaneous payment, the tax is placed in collection by tax roll and then becomes immediately due in full art. 175-I ; tax of less than 100 dirhams may not be issued by tax roll.

3. Within three months of the death

   Return of the deceased's global income by the beneficiaries art. 85-II ; where they continue the activity, the request relating to the de facto company or to the deferral, before expiry of that period.

4. Thirty days, then thirty days

   In the event of default, an invitation to file within a period of thirty days, then notification of the assessed bases before assessment on an ex officio basis within a second period of thirty days art. 228-I and II.

5. Up to 31 December of the 4^th year

   The administration's power to correct art. 232-I ; for years never declared, liability extends up to a limit of ten years art. 232-VIII-15°.

The article 85 return is expressly listed among those whose omission opens the way to assessment on an ex officio basis art. 228-I-1°.

Documents and supporting evidence

The elements of the file

The file rests on the following elements :

• Identification elements : address of the tax domicile or principal place of business, nature of the occupations carried on, national identity card or foreign national's card, tax identifier and municipal services tax article number art. 82-I.
• Elements establishing the taxable period : documents allowing Moroccan income for the year and foreign income acquired at the date of cessation to be fixed art. 27-II, or acquired from 1 January to the date of death art. 175-I.
• Evidence of withholdings suffered : amount taxed, amount withheld, period concerned, identity and tax identifier of the person responsible for operating it art. 82-I.
• Documents specific to the estate : elements establishing beneficiary status and, where the activity is continued, the inventory of assets used in the professional business, which article 85-II requires to be attached to the request relating to the de facto company art. 85-II.

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

Points to watch

What can cause a file to fail