Free zones and tax optimisation: what the law allows
Morocco’s free-zone status offers a privileged tax framework, but tax optimisation goes beyond simply applying the exemptions provided for by law. The companies that make the most of this regime combine sound structuring of their activity, rigorous management of their financial flows and forward tax planning.
It is essential to distinguish legal tax optimisation — which consists of making full use of the provisions laid down by the legislator — from tax evasion, which is illegal and exposes the company to reassessments and criminal penalties. For an overview of the regimes available, see our comparison of Morocco’s free zones in 2026.
Maximising the CIT exemption over the first 5 financial years
The full exemption from corporate income tax (CIT) during the first 5 profitable financial years is the main tax advantage of the free zone. To make the most of it:
- Anticipate the timing of setup: the 5-year count begins with the first profitable financial year (not the date of setup). If your first year is loss-making, it does not count. Plan the start of operations accordingly.
- Allocate deductible expenses to post-exemption years: exceptional expenses and accelerated depreciation are more useful for tax purposes after the exemption period, when the a corporate income tax rate that depends on the company’s situation applies.
- Optimise dividend distribution: the withholding tax on distributed dividends stands at 10% in 2026 (standard rate, following the reform that gradually brought it down from 15% to 10%). Since the 2023 Finance Act, the permanent exemption that free-zone and CFC companies used to enjoy is limited to foreign-source dividends paid to non-residents; a double-taxation treaty may further reduce the rate applicable to a non-resident shareholder.
Transfer pricing and intra-group transactions
For companies that are part of a multinational group, transfer-pricing policy is an important optimisation lever — and a point of tax vigilance. In a free zone:
- Transactions between the free-zone subsidiary and its foreign parent company must comply with the arm’s length principle.
- A well-documented transfer-pricing policy makes it possible to allocate profits legally to the entity with the lowest tax burden.
- Since 2022, companies carrying out more than MAD 50 million of intra-group transactions are subject to a transfer-pricing documentation obligation in Morocco.
Investments and tax deductions
Certain investments made by a free-zone company generate additional tax advantages:
| Type of investment | Tax advantage |
|---|---|
| Imported equipment and machinery | Exemption from customs duties and import VAT |
| Professional training of employees | Deductible from the CIT base + possible financing through the TFP |
| Research and development | Deductibility of R&D expenses, possibility of accelerated depreciation |
| Investments in renewable energy | CIT exemption on income generated by solar/wind installations |
The Professional Training Tax (TFP) and the apprenticeship tax
Free-zone companies are liable for the TFP (1.6% of payroll) and the apprenticeship tax (0.25% to 1.6%). These taxes can be optimised through direct training expenditure: sums paid to approved training bodies are deductible from the TFP due.
The minimum contribution: a floor to watch
The minimum contribution (CM) is payable by all Moroccan companies even in the absence of profit. Its rate is 0.25% of turnover (minimum MAD 3,000), since the 2023 Finance Act lowered it from 0.50% to 0.25% (Article 144 of the General Tax Code). In a free zone, companies are exempt from the minimum contribution during the CIT exemption period. After that period, the CM becomes payable and must be provisioned for.
Conclusion
Tax optimisation in a free zone rests on a combination of planning, structuring and rigorous monitoring. Companies that anticipate the end of the exemption period, document their transfer pricing and maximise their legal deductions achieve significant savings. Where group structuring is involved, a holding company under CFC status and a well-planned dividend repatriation strategy are powerful levers. At Cabinet Dami & Associés, we support our clients throughout their tax cycle, from setup to the annual CIT return — discover our tax and social advisory services.
The corporate income tax (IS) rate applicable after the exemption period depends on each company’s situation — in particular whether the activity is export-oriented and whether there is local turnover (a so-called “mixed” activity). Cabinet Dami carries out a tailored study to determine the regime and rate that apply to your specific case.
Disclaimer: the tax and legal information presented in this article is provided for general guidance only and is subject to change (finance acts, circulars, treaties). It does not constitute personalised advice. Before making any decision, contact Cabinet Dami & Associés for an analysis tailored to your situation.
