Morocco imposes taxes on large foreign online platforms
Morocco seeks higher state revenues. The Moroccan kingdom has decided to impose taxes on large foreign entertainment companies and online platform services that provide remote services for the Moroccan market.
The North African country's 2024 Finance Law included changes to the system of taxation regarding the programming and activity of foreign online platforms operating in Morocco.
From now on, major companies such as Google, Netflix, Spotify, Amazon or Airbnb will have to specify their profits and sales figures, within the tax regulatory framework proposed by the Moroccan state.
According to information from L'Économiste, the government proposed to regulate the activities of online streaming giants in order to ensure fairness in terms of taxation, taking into account the business activity of these companies in the Moroccan market.
This issue is of great importance because it opens up an important area of revenue for the Moroccan state. This is an important source of financing that can be used to obtain more resources that will benefit the community, since these revenues can subsequently be used for other services or social benefits for the citizens.
Article 115 of the Finance Law stipulates that non-resident online service providers must register on an electronic platform, obtain their tax ID if they offer certain services to Moroccan customers, declare their monthly transaction number in Morocco and pay taxes for the activity related to the Moroccan market. They must also submit a monthly declaration of their turnover generated in Morocco and take into account the payment of the corresponding tax, without the possibility of tax deduction. They will also have to keep an electronic record of the services provided, which will be kept for a period of ten years.
Although the major players in the sector operate in Morocco without legal representation, under the new Finance Law they will respect the applicable tax rules, as stipulated in the regulations.
Thus, the taxation of large digital companies and online platforms is now a reality in Morocco thanks to this new variant in the Finance Law of 2024 that affects companies such as Netflix, Spotify, Amazon Prime and other online gaming apps, which will have to be taxed in Morocco, making their turnover figures public and paying the corresponding taxes, as reported by L'Économiste.
Morocco thus joins many other countries that decided to regulate this section that affects foreign companies providing remote services for the local market.
Services covered by taxation
Remote services subject to VAT include the provision and hosting of websites and remote maintenance of software and hardware. Other services involved are the supply of software and applications and their updating, the supply of digital content (music, films, online games, games of chance, images, videos, texts, information, etc.), subscription to film and television platforms dedicated to video on demand (VOD), databases or their provision, as well as the remote provision of training, consultancy or assistance services, according to the same information served.