The tax measures taken are detailed below:

We will shortly issue a further newsletter on the procedure for approving accounts for the financial year 2019 in the context of the general closure of the courts.

DEFERRAL OF TAX DEADLINES TO 30 JUNE

The Economic Intelligence Council ("CVE") of 19 March 2020 decided to postpone the filing of certain tax returns to 30 June 2020 for companies whose turnover for fiscal year 2018 is less than MAD 20 million (excluding tax).

However, the publication in the Official Gazette of Decree-Law No. 2.20.292 of 24 March 2020 promulgating provisions relating to the "state of public health emergency" has raised certain questions as to the exact scope of application of its Article 6, which provides that all the deadlines provided for by the laws and regulations in force are suspended until the day after the lifting of the state of public health emergency (i.e. 20 April 2020, unless extended).

Are tax deadlines covered by the provisions of Article 6 of the Decree-Law? In order to remove any doubt, the Directorate-General for Taxation (“DGI”) has published a statement specifying that the following are exclusively concerned by the postponement of tax due dates detailed in the CVE's statement of 19 March, without need for any prior administrative formalities:

• Filing of the tax return for the financial year ending in 2019;  
• Payment of the supplementary tax due for tax year 2019;
• Payment of the first instalment of the tax due for the current tax year

These measures, which ultimately only concern corporate income tax, are intended to relieve companies on two levels: administratively, with the postponement of the filing of the tax return for financial year 2019, and financially (cash flow) with the postponement of the payment of the supplementary corporate income tax 2019 and the first instalment of corporate income tax due for the current year^[1].

However, the communiqué does not specify the conditions for the application of these measures for companies that do not close their financial year on 31 December. For instance, does a company that closes its financial year on 31 January benefit from this measure, and if so, under what conditions? In this case, as the return must be filed before the end of April 2020, it seems prudent to indicate that the extension of the deadline is only 2 months (instead of 3 for companies closing on 31 December) and is limited to 30 June 2020.

Furthermore, this extension does not apply to taxes for which companies act only as tax collectors, including VAT, income tax withheld at source on salaries, withholding tax on the payment of dividends, interest or remuneration to non-residents and stamp duty.

As regards companies whose turnover exceeded MAD 20 million (excluding tax) during tax year 2018, these:

• are not concerned by the relaxation of tax obligations provided for in CVE's communiqué and therefore remain subject to common law: obligation to file the 2019 tax return and payment of corporate tax as part of the regularisation of corporate tax for 2019 and the first instalment for 2020 by Tuesday 31 March 2020 at the latest.
   
• may request a deferral or postponement of the payment of the tax upon request to the Minister of Finance^[2], particularly in the event of serious cash flow difficulties or major difficulties in establishing the 2019 tax return^[3] .

SUSPENSION OF TAX AUDITS AND NOTIFICATIONS TO THIRD PARTY HOLDERS UNTIL 30 JUNE 2020

With regard to the suspension of tax audits and Third Party Holders (Avis à Tiers Détenteurs, or ATDs), the DGI has not further clarified the details of the measure. However, these measures should apply as follows:

• Only those ATDs whose execution was scheduled from 18 March 2020 are concerned by the suspension until 30 June 2020;
   
• Only tax audits that were scheduled to take place from 18 March 2020 are concerned by the suspension until 30 June 2020.

As regards tax audits, audit opinions that were due to be sent as of 18 March 2020 are postponed until at least 30 June 2020. In the absence of further communication on this subject, all tax audit procedures in progress will continue in accordance with the terms and deadlines provided for by the Moroccan General Tax Code.

DEDUCTABILITY OF DONATIONS MADE TO THE COVID-19 SPECIAL FUND

The DGI confirmed in a press release that donations made by natural or legal persons to the Special Fund for the Management of the Coronavirus Pandemic (Covid-19) are considered as donations in the sense of accounting expenses, and are deductible from the tax result.

Natural persons referred to are those carrying out a professional activity and who keep accounts. Individuals (e.g. employees) making a donation in a private capacity will not be able to deduct these on their global income tax return.
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[1] Taxpayers subject to the minimum contribution also benefit from this measure.
[2] An application must be filed with the Minister's office for individual consideration. It must be duly motivated (statement of financial difficulties, etc.) and may be rejected.
[3] In practice, considering timeframes, this possibility seems difficult to implement.

This legal update is not intended to be and should not be construed as providing legal advice. The addressee is solely liable for any use of the information contained herein and the Law Firm shall not be held responsible for any damages, direct, indirect or otherwise, arising from the use of the information by the addressee.

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