Morocco, a growing hub for trade and investment in North Africa, has adopted several international tax measures to align with global standards on tax transparency and fairness. Although Morocco is not a member of the Organisation for Economic Co-operation and Development (OECD), the country has made strides in improving tax transparency by committing to OECD’s Base Erosion and Profit Shifting (BEPS) project, particularly in implementing Country-by-Country Reporting (CbCR). This guide provides Chief Financial Officers (CFOs) and financial executives with a comprehensive overview of the CbCR regulations applicable in Morocco, helping them understand if their multinational enterprise (MNE) is affected and how to comply with the local requirements.

Applicability of CbCR in Morocco

Criteria for Reporting:

• Morocco’s CbCR requirements are applicable to multinational enterprise groups with consolidated annual revenues of MAD 8.122 billion (approximately €750 million) or more in the preceding fiscal year.
• The obligation to file a CbC report applies to the ultimate parent entity of an MNE group that is tax resident in Morocco.
• If the ultimate parent entity is based in a country that does not have CbCR requirements, or if the country does not exchange CbCR information with Morocco, a constituent entity in Morocco may be required to file the CbC report locally as a surrogate.

Relevant Legislation:

• Morocco introduced the CbCR requirements as part of its alignment with the OECD BEPS Action 13 recommendations. The regulations are incorporated under the Finance Law and Law No. 115-20, ensuring that Morocco is part of the global effort to combat base erosion and profit shifting (BEPS).

Reporting Requirements

Information to be Reported:

• The CbC report must include comprehensive financial information regarding each jurisdiction where the MNE operates. This includes:
  • Total revenues (broken down into related-party and unrelated-party transactions)
  • Profit or loss before tax
  • Income tax paid and accrued
  • Stated capital and accumulated earnings
  • Number of employees
  • Tangible assets (excluding cash or cash equivalents)
• The report must also include details of all constituent entities within the MNE group, along with the tax jurisdiction and main business activities of each entity.

Form and Submission:

• The CbC report must be submitted electronically using the XML format prescribed by the OECD. Morocco follows the standard reporting template as outlined in BEPS Action 13.
• The report must be submitted via the Moroccan tax authority’s online platform, Direction Générale des Impôts (DGI), which provides the necessary tools for CbCR submissions.
  • For more details on submission, visit the Moroccan Tax Authority website.

Filing Deadlines

• The CbC report must be filed within 12 months following the end of the MNE group’s fiscal year. For instance, if the fiscal year ends on 31 December 2023, the CbC report must be submitted by 31 December 2024.
• MNE groups that are not the ultimate parent entity but are required to file CbCR in Morocco must notify the tax authorities of the reporting entity before the end of the fiscal year.

Penalties for Non-Compliance

Penalties:

• Morocco imposes strict penalties for non-compliance with CbCR obligations:
  • Late filing or failure to file a CbC report may result in penalties ranging from MAD 500,000 to MAD 1,000,000 (approximately €45,000 to €90,000).
  • Filing inaccurate or incomplete reports may also lead to fines and could trigger further investigation or tax audits by the Moroccan tax authorities.

Defences:

• MNEs may present reasonable cause for non-compliance or errors in filing the CbC report. However, such cases are reviewed individually by the Moroccan tax authorities, and leniency may be applied at their discretion.

Confidentiality and Use of Information

Data Protection:

• CbC reports submitted in Morocco are treated as confidential tax documents. The information contained in the report is used solely for risk assessment purposes to evaluate potential base erosion and profit shifting (BEPS) risks and is not automatically used for tax assessments.
• Morocco has committed to exchanging CbC reports with other tax authorities through the Multilateral Competent Authority Agreement (MCAA), ensuring that data is shared only with jurisdictions that have adequate confidentiality measures in place.
• Moroccan tax authorities will only exchange the CbC report with tax authorities of countries that have an agreement in place to receive and protect the information.