Since 1 July 2026, a new tax obligation is already binding on many Moroccan landlords and businesses: a 5% withholding tax on certain commercial rents, coupled with an additional 2% registration duty on real estate sales settled in cash. Stemming from the 2026 Finance Act, these measures are no longer budget announcements — they are being enforced by the tax administration, and non-compliance already exposes taxpayers to reassessment.
1. A Reform Voted, Published, and Already Enforced by the Tax Authority
The Finance Act for fiscal year 2026 — Law No. 50.25 — was enacted in late December 2025 and published in the Official Bulletin on 16 December 2025. Some of its tax provisions took effect as early as 1 January 2026, but the measures relating to the rental withholding tax and the real estate traceability duty followed a deferred timeline, set for 1 July 2026.
That deadline has now passed: the General Directorate of Taxes (DGI) has issued several notices detailing the practical rules of application, and affected businesses have already been applying these withholdings on rent payments for six weeks. The measure forms part of the implementation of Framework Law No. 69.19 on tax reform, adopted in 2021, which aims to strengthen transaction traceability and broaden the tax base.
2. The 5% Withholding Tax on Commercial Rents
In practical terms, any corporate entity paying rent to another corporate entity subject to corporate tax, or to an individual under the actual net income or simplified net income regime, must now withhold 5% of the gross, VAT-exclusive amount of rental income, whether relating to built or unbuilt real property or any type of construction.
The rollout is phased according to the size of the tenant company: since 1 July 2026, it applies to companies with VAT-exclusive turnover of 500 million dirhams or more. This threshold will drop to 350 million dirhams from 1 January 2027, then to 200 million dirhams from 1 January 2028, progressively extending the mechanism to a growing number of operators.
This withholding is not an additional tax: it is an advance payment, creditable against the corporate or income tax owed by the landlord, with a right to refund in case of surplus. Amounts withheld must be remitted to the Treasury before the end of the month following the withholding, along with a summary declaration attached to the tenant company's annual tax return.
3. An Additional 2% Registration Duty Against Cash Payments
The second major measure concerns real estate transactions themselves. Since 1 July 2026, an additional 2% registration duty applies to onerous transfers of real property, real property rights, or business assets, whenever the transaction amount exceeds 300,000 dirhams and the payment method does not ensure traceability of the transaction.
This targets, in particular, deeds that fail to mention payment references, or payments made outside authorized means — non-endorsable crossed cheques, bank transfers, bills of exchange, electronic payment instruments, or set-off. Where payment combines cash and a traceable means, the 2% surcharge applies only to the portion paid in cash. The measure directly targets under-valuation and partial cash payment practices, which remain common in certain real estate transactions in Morocco.
4. Other Tax Adjustments Already Applicable in Parallel
These two measures come on top of other 2026 Finance Act changes already in force since 1 January: the two-tier corporate tax structure (20% below 100 million dirhams of taxable net income, 35% above that threshold, 40% for the financial sector), the gradual convergence of VAT rates toward 20%, 10%, and 0%, and the increase of the family-charge deduction for income tax from 500 to 600 dirhams per dependant per year.
5. What Landlords and Businesses Should Verify Now
Landlord companies whose tenants exceed the applicable turnover threshold should verify that the 5% withholding has indeed been applied to rents collected since July, and confirm it is being correctly credited against the corporate or income tax owed. For buyers and sellers of real estate or business assets, any payment exceeding 300,000 dirhams must go through a traceable payment method to avoid the 2% registration duty surcharge, which can represent a significant additional cost on a high-value transaction.
Point of Caution
Tenant companies subject to the new turnover threshold must adapt their rent payment procedures without delay to incorporate the 5% withholding tax, or risk reassessment for failure to remit the withheld tax. Likewise, any real estate transaction currently under negotiation that involves a cash component should be restructured to limit exposure to the additional 2% registration duty, which applies from the very first dirham paid in cash once the 300,000-dirham threshold is exceeded.