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Morocco: New Fiscal paradise for retirees

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Increasingly, European and French pensioners in particular, discover and choose Morocco as a destination for their retirement. If the climate and quality of life topped the reasons for this choice, better purchasing power is also a major reason. But it seems today that the number of pensioners wishing to retire in this country is steadily increasing. For highlighting a Franco-Moroccan agreement, which is still for forty two years, seems to date back, through calls of the Moroccan tax to French.

A very attractive tax treaty with Morocco

It is in 1971 that the Franco-Moroccan agreement stipulates that “pensions and annuities shall be taxable only in the only state where the taxpayer has his fiscal domicile”. This means that even if you hit a pension from the French government, it is enough that you have your tax home in Morocco and you will be taxable on your income only at the level of the Kingdom. So no taxes in France and very little in Morocco. Especially since the IRS considers as Moroccan resident anyone who stays at least 183 days per year in the Kingdom. So, just about 6 months of living in Morocco is sufficient to be considered as a resident. The only restrictions imposed by Morocco are not abusing round trips in France.

A very interesting tax calculation

From the moment when French are declared residents of Morocco, they will get very large benefits in terms of taxes. Firstly, regarding the income tax. For the French resident in Morocco not only entitled to a 80% reduction in their tax liability, but in addition, they have the opportunity, if their pension is paid directly into a bank account in Morocco, in dirhams and non-convertible, to apply a reduction on the amount of pensions received by 40%.

offshore maroc

offshore maroc

Specifically, a retiree who receives € 2,000 per month of pension will declare only (2000 euros * 12 * 60%) 14,400 euros to the Moroccan tax. He will then undergo the Moroccan tax rate on this amount and will be entitled to a discount of 80% on what he should pay. In conclusion, the tax rate for Moroccan residents of French origin is of the order of 1 to 2% on average and it does not exceed 4% generally. Enough to attract much envy.

But the income tax is not the only advantage to the tax level because Morocco does not know either of taxes on wealth or inheritance. And finally, all retirees are exempt from taxes on rental income for three years and they are then entitled to a 40% of reduction.

A brochure recently presented the benefits of expat retirees to Morocco. Taxation, easy living, climate. Everything was put forward to attract them. And given the property prices which, despite the recent rise is still very affordable, we understand why Morocco can quickly become the Eldorado for French pensioners.

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