Morocco | 2026 Finance Law Enacted

Morocco | 2026 Finance Law Enacted

The Finance Law (Law No. 50-25) was promulgated by Decree No. 1-25-67 dated 10 December 2025. The law introduces several amendments to the General Tax Code. Below are the key measures affecting payroll tax effective 1 January 2026.

Legislative summary of changes
Increase in family allowance deduction
  1. The annual deduction granted for each dependent supported by the taxpayer has been increased from MAD 500 to MAD 600.
  2. The maximum annual allowable deduction has been increased from MAD 3,000 to MAD 3,600.
  3. Legal reference: Article 74 of the General Tax Code.

Special income tax regime for Casablanca Finance City (CFC) employees
  1. Employees working for companies holding Casablanca Finance City status benefit from a flat personal income tax rate of 20% on employment income for a maximum period of ten (10) years, starting from the date of commencement of employment.
  2. Effective 1 January 2026, eligible employees may opt to be taxed under the progressive income tax scale, provided a written request is submitted to the employer by 1 February of the relevant year.
  3. Employees may withdraw this option by submitting a request to their employer by 1 February of the relevant year.
  4. Eligible employees include:
    1. Employees commencing employment on or after 1 January 2026.
    2. Employees already benefiting from the CFC regime whose ten-year entitlement had not expired by 31 December 2025; such employees may continue to benefit until the ten-year limit is reached.
    3.  Employees who had already benefited from the regime for five (5) years as at 31 December 2017, who may continue to benefit for the remaining years, subject to the overall ten-year cap.
    4. Legal reference: Article 73-II-F-9 of the General Tax Code.
Pensions and retirement income
The following income is exempt from personal income tax:
  1. Pensions paid under mandatory basic pension schemes, as defined in Article 59-II-A.
  2. Pensions paid to private-sector retirees under group supplementary retirement insurance contracts managed by the Moroccan Interprofessional Retirement Fund (CIMR), under the conditions set out in Article 28-III.
  3. This exemption does not apply to retirement pensions or life annuities paid under other supplementary retirement schemes.
  4. Legal reference: Article 57-27 of the General Tax Code.
Salary and wage declaration requirements for CFC employees
  1. In addition to the standard annual payroll declaration, employers must submit an annual annex listing employees benefiting from the special CFC income tax regime.
  2.  The annex must be completed in the format prescribed by the Moroccan tax authorities.
  3. Legal reference: Article 79-VII of the General Tax Code.
Additional information and resources
Click here to access the official publication

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