Taxation of lawyers in Morocco: the advance per case, withholding taxes and the exemption for new lawyers

The 2023 Finance Act profoundly changed how lawyers are taxed. After several weeks of discussions between the profession and the government, a specific regime was adopted. It is based on a tax advance paid for each case, in addition to the general rules of income tax on professional income.

The principle: a tax advance for each case

For each case brought before the courts, a lawyer practising as an individual pays an advance on income tax of MAD 100. The amount initially proposed was MAD 300; it was reduced following the agreement with the profession.

Two payment methods are provided:

• payment per case, when the case is filed;
• a global payment, calculated on the number of cases in the period, within the deadlines set by law.

Some cases, in particular social cases, are outside the scope of this advance.

An advance, not a final tax

The amounts paid are instalments. The lawyer remains subject to income tax on their actual professional profit, determined from their accounts or under the regime that applies to them, and declared each year.

In the annual return:

1. the lawyer calculates the tax due on the year’s professional income;
2. they offset the advances paid per case;
3. they pay any balance, or request a refund of any excess.

Hence the importance of keeping evidence of every advance paid.

The exemption for new lawyers

Lawyers newly admitted to the bar benefit from an exemption for five years from their admission. This period was originally three years; it was extended under the 2022 agreement.

The exemption does not remove filing obligations: tax registration, annual returns and record-keeping are still required.

Withholding by clients

Fees paid to a lawyer by a company or a public body may also be subject to withholding tax, calculated on the amount excluding VAT. The rate has been set at a reduced level for lawyers practising individually, and at an even lower level for professional civil partnerships of lawyers. These withholdings are also offset against the annual tax.

We present the general regime of these withholdings in our article on withholding tax on fees and commissions.

VAT and other obligations

• Lawyers’ fees are subject to VAT, at the rate provided for the profession, with their own filing obligations.
• A practice with salaried staff must manage payroll, the CNSS and income tax withholding on salaries.
• Practising through a professional civil partnership follows tax rules distinct from individual practice.

In short

• An advance of MAD 100 per case, offset against the annual tax.
• A five-year exemption for newly admitted lawyers.
• Possible withholding on fees paid by companies and public bodies.
• An annual return that brings it all together and allows excess payments to be refunded.

Ascensu supports liberal professions with their bookkeeping and tax returns.

This article is provided for general information, as at its publication date. It is not personalised advice: the rules change and every situation must be reviewed on its own facts.