The 2023 Finance Act generalised a simple principle: when a business pays fees, commissions or other remuneration to a professional, it withholds part of the tax that professional owes and pays it to the Treasury. The 2026 Finance Act extends the mechanism further.
Two separate withholdings
| Recipient of the payment | Rate | Tax concerned | Who withholds |
|---|---|---|---|
| Individual carrying on a professional activity, on the actual or simplified net income regime | 10% | Income tax | Clients that are legal entities, public or private, and some clients who are individuals |
| Legal entity (company) | 5% | Corporate income tax | The State, local authorities, public bodies and, from July 2026, new categories of companies |
In both cases, the withholding is calculated on the amount excluding VAT and must be paid to the Treasury within the month following payment.
A withholding offset against tax
For the professional or company that suffers it, the withholding is not an extra tax: it is an advance on the year’s tax.
- An individual professional offsets the withholdings suffered against the income tax due for the year, in their annual return.
- A company offsets the 5% withholdings against its instalments and corporate income tax.
- If withholdings exceed the tax due, the excess can be refunded.
Special regimes exist for some professions. For some taxpayers, such as self-employed teachers working in educational institutions, the withholding is final. Lawyers have a specific regime, presented in a dedicated article.
What the 2026 Finance Act changes
The 5% withholding on payments to companies was applied only by public bodies. It now extends to services paid for by:
| Clients required to withhold | From |
|---|---|
| Credit institutions, insurance and reinsurance companies | 1 July 2026 |
| Companies with turnover of at least MAD 500 million | 1 July 2026 |
| Companies with turnover of at least MAD 350 million | 1 January 2027 |
| Companies with turnover of at least MAD 200 million | 1 January 2028 |
The clients concerned must attach to their returns a detailed statement of payments made and withholdings applied.
The same timetable applies to VAT withholding: a company serving large accounts may therefore suffer, on the same invoice, a corporate tax withholding and a VAT withholding.
Example
A consulting company invoices a bank MAD 200,000 excluding tax from July 2026, with 20% VAT (MAD 40,000), and holds a tax compliance certificate. Assume the service falls within the scope of both withholdings.
- Corporate tax withholding: 200,000 × 5% = MAD 10,000
- VAT withholding: 40,000 × 75% = MAD 30,000
- Amount received: 240,000 − 10,000 − 30,000 = MAD 200,000
The company recovers these MAD 40,000 by offset against its corporate tax and VAT, but with a cash timing gap to anticipate.
Good reflexes
If you pay fees: identify each provider’s status, apply the right rate, pay over within the month and keep a summary statement.
If you receive them: track withholdings client by client, ask for the supporting documents and offset them in your returns so you do not pay twice.
Ascensu handles these withholdings in its clients’ tax returns, whether they apply them or suffer them.
Official sources
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.