Finance

2026 Finance Act: Income Tax Rate Reduced from 38% to 37% — What It Means for MRE Professionals

14 February 2026·2 min read·Source: Direction Générale des Impôts (DGI)

A reduction in the marginal income tax rate for high earners. An analysis of the impact for MREs considering consultancy work or relocation to Morocco.

The 2026 Finance Act introduces a notable amendment to Morocco's income tax (IR) schedule: the top marginal rate falls from 38% to 37% for annual income exceeding 180,000 dirhams. While the reduction may appear modest, it forms part of a broader programme of incremental tax reform aimed at making Morocco more attractive to professionals and entrepreneurs from the diaspora.

For an MRE considering setting up a consultancy practice, working as a freelancer, or managing a Moroccan subsidiary, this one-percentage-point reduction represents a tangible tax saving. On taxable annual income of 300,000 dirhams (approximately €28,000), the annual saving amounts to around 1,200 dirhams (approximately €110) — a modest figure in itself, yet the policy signal it sends carries considerably more weight than the number alone.

Non-tax-resident MREs also benefit from a specific regime: income derived from foreign sources is not subject to taxation in Morocco. However, once they receive rental income (from property lettings) or dividends from a Moroccan company, such income falls within the Moroccan tax base.

The 2026 Finance Act also retains the salary income allowances available to returning MRE executives, a provision introduced to encourage skilled diaspora members to contribute to the domestic economy. If you are an engineer, doctor, legal professional, or finance specialist residing in Europe and considering a return to Morocco or a dual-country working arrangement, we recommend consulting a Moroccan chartered accountant to optimise your tax position.

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