Withholding tax on rents has become a major component of Morocco's real-estate tax framework. In many cases, the professional tenant is no longer just a payer of rent: it becomes the party responsible for withholding tax and remitting it directly to the DGI.

The issue is therefore not only tax-related. It also affects contracts, accounting treatment, filing discipline, and the day-to-day organization of tenant businesses and landlords.

A reform aligned with a broader tax strategy

Rent withholding tax is part of Morocco's wider effort to improve tax collection, trace rental income more effectively, and reduce informality in the leasing market.

  • Stronger tax collection mechanisms
  • Better traceability of rental income
  • Reduced informality in the real-estate sector
  • Closer alignment with digital filing tools such as SIMPL

What is withholding tax at source (RAS)?

Withholding tax at source means that the tax is deducted directly when the rent is paid. The tenant pays the landlord the net rent and remits the withheld amount to the DGI on behalf of the landlord.

  • The gross rent is the basis for calculation
  • The landlord receives the rent net of withholding
  • The tenant transfers the withheld tax to the DGI
  • The withheld amount is credited against the landlord's final personal income tax

Who is covered by the withholding obligation?

The system mainly concerns individual landlords receiving rental income and professional tenants required to operate the withholding. The tax status of both parties should be checked from the start of the lease.

  • Covered landlord: an individual earning rental income
  • Liable tenant: a company subject to corporate income tax
  • Liable tenant: an individual taxed under the real or simplified net-income regime
  • If the landlord is a company subject to CIT, this withholding mechanism does not apply

Rates applicable in 2025-2026

Rental income is taxed according to thresholds based on annual gross rent. Applying the correct bracket matters, because a mistake can quickly lead to penalties and tax reassessments.

  • Below MAD 30,000 per year: exempt at 0%
  • From MAD 30,001 to MAD 120,000: 10%
  • Above MAD 120,000: 15%
  • The withholding is not final: the landlord must still file an annual income tax return

How is the withholding calculated? Practical examples

The distinction between gross rent and net rent is essential. The lease should ideally state the gross amount, especially when the landlord expects to receive a specific net amount.

  • Gross monthly rent of MAD 5,000: withholding of MAD 500 when the 10% rate applies
  • Gross monthly rent of MAD 20,000: withholding of MAD 3,000 when the 15% rate applies
  • Amount paid to the landlord = gross rent minus withholding tax
  • If a net amount is contractually required, the gross rent must be recalculated beforehand

Filing obligations for the tenant

The professional tenant is the key operational actor in this mechanism. It must withhold, declare, and pay the tax on time, while also issuing proof of withholding to the landlord.

  • Withhold the tax when the rent is paid
  • Pay the withheld amount to the DGI before the end of the following month
  • Use the SIMPL platform for filing and payment
  • Provide a withholding certificate to the landlord

Filing obligations for the landlord

Source withholding does not remove the landlord's own tax obligations. The landlord must still report rental income in the annual return and keep the supporting certificates received from tenants.

  • Declare rental income in the annual global income return
  • File before the end of February of the following year
  • Keep or attach the withholding certificates
  • Credit the tax already withheld against the final personal income tax due

Operational impact for tenant businesses

For businesses, rent withholding tax creates real administrative work. The issue affects contract management, accounting entries, documentation, and deadline monitoring.

  • Identify all lease agreements that fall within scope
  • Calculate the monthly withholding accurately
  • Reconcile accounting records with DGI payments
  • Archive certificates, payment evidence, and supporting documents

Risks and points of attention

The most common mistakes are straightforward but costly: failing to withhold, confusing gross and net rent, using the wrong rate, or paying late.

  • Failure to withhold the tax
  • Late payment or late filing
  • Wrong rate applied
  • No certificate delivered to the landlord

Good practices for secure lease management

The best protection is anticipation. Sound lease management relies on a clear contract, proper identification of each party's tax status, and consistent discipline in filing and payment processes.

  • Draft a lease that clearly states the gross rent
  • Confirm the landlord's tax status before processing payments
  • Set an internal calendar for recurring payments and filings
  • Seek professional support when the calculation or scope is unclear

Source: First One Immobilier