Refunds of tax on property capital gains : the additional provisional payment

Definition

What this covers

Property capital gains are the gains recorded or realised on the sale of property located in Morocco or the disposal of rights in rem attaching to it, and on equivalent transactions : contribution to a company, exchange, partition with balancing payment, transfer for no consideration art. 61-II CGI. The net gain is taxed at 20 % art. 73-II-F-6° CGI, subject to a minimum charge that may not be less than 3 % of the disposal price, even where no gain arises art. 144-II-1° CGI.

The return is delivered against a receipt within thirty days of the disposal, where applicable together with payment of the tax art. 83-I CGI. The amount paid follows from an assessment made by the taxpayer, before any review by the administration. A refund corrects the gap between what has been paid and what was due.

Scope

Who is affected

• The seller who has not filed on the basis of the assessment certificate and has not requested a prior notice : they alone are liable for the provisional payment art. 173-I CGI.
• Both the seller whose return has been subject to no adjustment, and the one whose basis of assessment has been revised.
• The seller under a repurchase agreement who buys back the property disposed of art. 62-III CGI.
• The individual paid on an expropriation, an unlawful dispossession or a judicial transfer : the 5 % withheld from the gross amount paid is creditable against the tax, with a right to a refund art. 160 quater CGI.

The provisional payment does not apply to everyone : excluded are those carrying out the transactions exempted under article 63 (II and III), contributions of property or of rights in rem to the assets of a company or of an OPCI as provided for in articles 161 bis-II and 161 quinquies — and those alone, those regimes having their own conditions and their own returns — and persons falling under the withholding mentioned above art. 173-I CGI.

Applicable rules

One provisional payment, two separate refunds

The provisional payment is not an additional tax : its amount is the difference between the tax declared and 5 % of the disposal price art. 173-I CGI. The code provides for two refunds, whose regimes do not overlap.

The procedure under article 224 governs the whole. Where the inspector adjusts the return or reassesses the acquisition price, unevidenced investment expenditure or the market value of the property disposed of, they notify the new basis, the grounds and the amount of the adjustments within a maximum period of ninety days following the filing of the return art. 224 CGI. The taxpayer has thirty days to accept that basis or to submit observations ; failing a reply, the assessment is made and may thereafter be challenged only by way of article 235.

Deadlines and limitation periods

The timeline

1. 30 days — the return

   Return and, where applicable, payment of the tax within thirty days of the disposal art. 83-I CGI. On an expropriation or a judicial transfer, the period runs from receipt of payment.

2. 30 / 60 days — prior notice

   Application within thirty days of the preliminary sale agreement ; reply amounting to an assessment or exemption certificate within sixty days, valid for six months art. 234 quinquies CGI.

3. 3 years, then 30 days

   Repurchase under the agreement, then application for a refund art. 241 bis-II-A CGI.

4. 90 days, then 30 days

   Maximum period allowed to the administration to notify the revised basis ; the taxpayer replies within thirty days of receipt art. 224 CGI.

5. 31 December of the 4^th year

   End of the assessment period, counted from the year in which the disposal was disclosed to the administration by registration of a deed or filing of the return art. 232-I CGI.

One asymmetry should be noted. For withholdings creditable against global income, a refund « must be made before the end of the year of the return » art. 241 bis-I CGI. For the provisional payment, article 241 bis-II-C states that it is made automatically, but sets the administration no time limit : a right without a deadline.

Documents and supporting evidence

What the file contains

The file rests on the following elements :

• The deeds of disposal and of acquisition : deed of sale, original acquisition title and, for a repurchase agreement, both authentic deeds.
• Evidence of the basis declared : documents relating to acquisition costs and investment expenditure, the only documents the code expressly requires to accompany the return art. 83-I.
• Evidence of the sums paid : the tax declared, the provisional payment and, where applicable, the amount withheld by the paying party.
• Elements relating to a special regime : documents relating to a main residence or to excluded transactions, and the assessment certificate where applicable.

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

Points to watch

What can derail a file