Country-by-Country Reporting - Mandatory filing starting 2022

Morocco has joined in March 2019 the inclusive framework on Base Erosion Profit Shifting ("BEPS") launched by the OECD in September 2013. Morocco's 2020 Finance Act has introduced the Country-by-Country Reporting ("CBCR") obligation starting 2022 to align the domestic tax legislation with Action 13 of the OECD's BEPS standards.

Article co-authored by Jalal Benhayoun - Directeur, Tax & Legal and Néghéla Arrassen - Manager, Tax & Legal

The CBCR is one of the three-tiered standardized approach to transfer pricing documentation introduced by Action 131. This standard consists on (i) a master file containing standardized information relevant for all multinational enterprises group members ("MNE"); (ii) a local file referring specifically to material transactions of the local taxpayer with the MNE, and (iii) a CBCR containing specific information relating to the global allocation of the MNE's income and taxes.

The CBCR is an essential tax administration tool for detecting and identifying transfer pricing risks and other BEPS2-related risks3.

The CBCR requirement has been codified in articles 154 ter, 199 bis, 214 and 219 of the Moroccan Tax Code (the "MTC") and commented on by the Circular Note n°730 ("CN730") released by the Tax Authorities on January 8th ,2020 to comment the Finance Bill 2020.

In consideration of the above, the key questions are the following:

  • Who is subject to CBCR?
  • What information and documents are required?
  • When and how to report CBCR to the Tax Authorities?
  • What is the penalty in case of failure to comply with the CBCR obligation?
  • What is the statute in terms of confidentiality and automatic exchange of information?

Based on article 154 ter of the MTC, companies required to file the CBCR are:

  • Morocco ultimate parent entity of an MNE establishing consolidated accounts with annual consolidated turnover equal or exceeding MAD 8,122,500,000 (approx. USD 812 million) in the previous fiscal year.
  • Any Moroccan company subject to corporate income tax in Morocco that meets one of the following conditions:

    - If it is directly or indirectly owned by a company located in a state which does not require CBCR filing and which would be required to file this declaration if it was located in Morocco.

    - If it is directly or indirectly owned by a company located in a state with which Morocco has not concluded an agreement including provisions relating to the exchange of information for tax purposes. Thus, if the company concerned is owned directly or indirectly by a company located in a State with which Morocco does not have an exchange agreement for the CBCR, the obligation to file the declaration is the responsibility of the company established in Morocco, or

    - If it is designated for this purpose by the MNE group and has informed the Tax Authorities.

If two or more constituent entities in Morocco are required to file a CBCR, one may be designated to file it by the MNE. In such a case, the designated is required to inform the Tax Authorities.

The CBCR must include on a country-by-country basis a breakdown of:

  • Revenues and profits made by the group,
  • Specific tax and accounting data,
  • Information on the identity and nature of the activities carried out by the group

The statutory form to be used for filing the CBCR is not released as of this paper publication date. The CN.730 provides that the form should be in line with the international standards, which refers to the OECD template4 that consists of 3 main tables:

  • Table 1: Overview of allocation of income, taxes, and business activities by tax jurisdiction
  • Table 2: List of all constituent entities of the MNE group included in each aggregation per tax jurisdiction
  • Table 3: Additional information

The form should be submitted electronically within 12 months following the end of the reporting fiscal year5. The first filing obligation is due as from 1st January 20226.

Confidentiality and automatic exchange with foreign tax administrations

The CN 730 provides that any information collected through CBCR is kept strictly confidential and protected, as required by the Moroccan laws and international treaties. The CBCR will be automatically exchanged7 with the countries' tax authorities provided a reciprocity agreement with Morocco to this effect.


Penalities in case of non-timely or incomplete, or incorrect filing

Article 199 bis of the MTC provides that in case of failure of filing the CBCR, the MTA notify the liable company to file/complete the CBCR within 15 days starting from the notification date. Failure empowers the MTA to apply a fine of MAD 500,000 (approx. USD 50,000), after informing the company by an official letter.

Morocco pursues its compliance with international tax standards. Moroccan companies that are members of international groups have no choice but to implement a rational and fully documented transfer pricing policy.Our dedicated team would be delighted to assist you with the CBCR in particular and Transfer Pricing requirements in general.

Grégoire Chaste.


1 OECD/BEPS Action 13: 2015 Final Report 
OECD/BEPS Action 13: Handbook on effective tax risk assessment
Annexe III to Chapter V of the OECD/BEPS Action 13: 2015 Final Report
Article 154 ter-I of the MTC
CN n°730 commenting the 2020 Finance Act
Article 214-VII of the MTC