Assets held abroad: The personæ non gratæ in the regularization process
It is back for the third time. The tax in full discharge of tax liability relating to the spontaneous regularization of assets and cash held abroad is due to run from January 1st to December 31, 2024 (see L’Economiste N° 6635 of 08/11/2023). However, the provision has undergone a number of changes in the 1st Chamber, which have prompted a number of comments.
The amendment introduced excluded people with foreign exchange disputes, as well as those who had already benefited from previous «amnesties». «The second tax in full discharge of tax liability was introduced during a difficult and complicated period. This period was marked by the health crisis. Omissions, difficulties in obtaining supporting documents, errors, or even bad advice…can occur», emphasize experts who add: «excluding people who have already benefited from the amnesty is questionable. They should be given a chance to catch up. This could always be rectified by the Second Chamber» of the Parliament.
In any case, spontaneous regularization spares tax filers from the sanctions provided for in the law against infringements of foreign exchange regulations. These consist of payment of six times the value of the asset, and can be combined with custodial sentences. This regularization also makes it possible to avoid the penalties provided for in the General Tax Code.
At the end of the «reconciliation» operation carried out in 2020, declarations totaled 6 billion Dirhams (US 600 million) for 1,959 declarations. The amount paid to the Treasury was 528.6 million Dirhams (US 52 million). By contrast, the 2014 operation was a great success. It resulted in 27.86 billion Dirhams (US 2.7 billion) in declared assets and 2.3 billion Dirhams (US 230 million) paid to the Treasury.
The next «edition» of the tax in full discharge of tax liability will concern the spontaneous regularization of assets and cash held abroad before September 30, 2023. It is aimed at individuals and legal entities with a residence, registered office or tax domicile in Morocco who are in breach of exchange regulations relating to assets held abroad or in foreign currencies. These include real estate held in any form abroad, financial assets, securities and other equity and debt instruments held abroad. In addition, there are liquid assets deposited in accounts opened with financial organizations, credit institutions, or banks located abroad. Tax offences include failure to declare income, proceeds, profits, and capital gains relating to real estate and movable assets, as well as foreign currency balances held abroad.
Khadija MASMOUDI
