Withholding tax: The taxman does not give up
Is there still a need for clarification concerning the modus operandi of the withholding tax in terms of Corporate Tax and Income Tax on fees and other remuneration paid by the national Government and local authorities to third parties? In any case, the General Treasury of the Kingdom (TGR) and the General Directorate of Taxes (DGI) have just issued a joint circular concerning the terms of implementation of this measure provided for by the 2023 Appropriations Bill.
The memo, which is intended for authorizing officers and public accountants, defines the persons concerned by the system, the tax base that is subject to a withholding tax, as well as the different types of fees, commissions, and brokerage fees. Authorizing officers must therefore carry out this operation at the time of the authorization of expenditure for the benefit of the beneficiaries concerned and establish two separate payment orders which are then summarized in the same issue slip, one for the amount of the withholding tax, and the second payment order mentioning the difference paid to the beneficiary. The joint memo also specifies that the deductions not made during the transitional period, corresponding to the expectation of the publication of the circular on tax measures, do not give rise to the right to charging via tax returns. For their part, public accountants, after receiving the payment orders, are called upon to check the validity of the expenditure by taking into account the file of taxpayers provided by the General Directorate of Taxes and including in particular their identification details, their tax system, and other details. The General Treasury of the Kingdom also specifies that oppositions, notices to third party holders, pledges, garnishments, assignments of receivables, and other reasons preventing payment will only apply to the sums ordered.
A certificate to this effect may be issued to the interested party, extracted from the Integrated Expenditure Management system (GID) administered by the General Treasury of the Kingdom. The General Directorate of Taxes will be informed on a daily basis of deductions at source made by authorizing officers and public accountants of the central Government and local authorities. The General Directorate of Taxes will receive on a daily basis a file communicated by the General Treasury of the Kingdom. Are therefore concerned by these tax levies legal persons subject to the corporate tax and natural persons who are subject to income tax whose income is determined according to either the Actual Net Income (RNR) or that of the Simplified Net Income (RNS) regime.
Legal persons who are exempt from the corporate tax remain of course free of the tax burden, as is the case also for persons who are subject to the income tax under the Single Professional Contribution or self-employment schemes…
Hassan EL ARIF
