The Moroccan government has published the Finance Law for the 2023 budget year. The following changes are affecting payroll:
1. Professional expenses deduction – increasing the rate of deduction of expenses inherent to the function or employment from 20% to 25% for gross annual income exceeding MAD 78 000.00; with an increase in the deduction ceiling from MAD 30 000.00 to MAD 35 000.00, and from 20% to 35% for gross annual income less than or equal to MAD 78 000.00.
2. Pension and life annuities – increasing the rate of the fixed allowance applicable to pensions and life annuities from 60% to 70% on the gross taxable amount not exceeding MAD 168 000.00.
3. As of 01 January 2023, the salary income of employees working on behalf of companies with the status of “Casablanca Finance City” will be subject to the ordinary Income Tax law.
Click here for the official communication.
Finance Law 2023 Changes
The following changes were made to all Morocco payrolls effective 01 January 2023:
1) The non-taxable portion of pension and annuity pay-outs has increased from 60% to 70%
• If pension/annuity pay-out is up to MAD 168 000.00, the non-taxable portion will be equal to 30% of pay-out.
• If pension/annuity pay-out is greater than MAD 168 000.00, then the first non-taxable portion will be equal to MAD 168 000.00 * 30%.
• The second non-taxable portion will be equal to the difference between the MAD 168 000.00 cap en the actual pay-out * 40%.
2) The professional expenses calculation
If gross income is greater than MAD 78 000.00 then professional expenses will calculate as follows:
• 35% of gross income up to and inclusive of MAD 78 000.00 plus
• 25% of gross income exceeding the first MAD 78 000.00
• up to a maximum of MAD 35 000.00 per annum pro-rata
If gross income is up to MAD 78 000.00 then professional expenses will calculate as follows:
• 35% of gross income
• up to MAD 35 000.00 per annum pro-rata
Impact of the Morocco Finance Law 2023 on PaySpace
• All changes are effective 01 January 2023.
• All Morocco payrolls have been recalculated.
• If the January payroll is already closed, create an interim run attached to January. The professional expenses will recalculate and the difference will display on the interim payslip.
• There were no other statutory changes.
Should you have any questions regarding the Morocco Finance Law 2023, please feel free to visit our Support page for more ways to get in touch, or email us at [email protected].
The PaySpace Team