This guide aims to contribute to a rapid, effective and efficient resolution of tax disputes within the framework of double taxation agreements that Morocco signed with other countries including free trade areas agreements.
Morocco seeks to protect itself by clarifying any outstanding or potentially unclear issues according to international standards.
1. The Subject of The Procedure
The MAPG applies when a natural or legal person, covered by a tax treaty that Morocco has concluded with another state, considers that measures taken entail or will entail for its taxation to not be in accordance with the said convention.
Therefore, this natural or legal person having the status of tax resident in the conventional sense may, without prejudice to the remedies provided for by national law, submit a written and reasoned request for a review of its taxation.
2. Scenarios and Time Limit
There are three scenarios where a person can submit a request.
- Dual residence
- Qualification of a type of income – a situation in which two States interpret the same income differently.
- Cases relating to an agreement at the end of a tax audit resulting in taxation contrary agreement’s provisions.
It should be noted that requests can be submitted within three years following the first notification of the measure, which results in taxation deemed to be not in accordance with the convention signed.
The general rule is that only disputes dating back a maximum of three years are considered.
However, it is better to refer to the article relating to the mutual agreement procedure in the signed tax treaty to ensure of the time limits for opening of the said procedure. Otherwise, when the tax treaty does not provide for an express deadline, it is the 3-year period provided for by international standards that applies.
3. Starting the Procedure and Information Required
The DGI indicates that the mutual agreement procedure can also be initiated by the competent authorities of the States which have concluded a tax treaty with Morocco to resolve problems relating to the interpretation or application of the convention.
The terms and conditions for accessing a mutual agreement procedure are strict.
The MPAG provides that requests must be submitted within specified time limits and contain specific information such as:
- Identification of the taxpayer
- Arguments put forward by the taxpayer
- Documents to support the taxpayer’s position
- Appropriate treaty references
- Reference to taxes and years
- Copy of tax notices and notification letters
- Copy of any judgments or appeals previously initiate
4. Other Important Considerations
- The MAPG provides that this procedure does not suspend ongoing legal procedures.
- The MAPG provides that this procedure does not suspend the collection of taxes.
- A request under the MAPG does not prohibit a person from initiating other actions under domestic legislation, such as an appeal.
- The MAPG provides that this procedure may last for 24 months on average.
- The end of the procedure is when the authorities inform the taxpayer of the results of their request. If the taxpayer accepts the result, they have to stop any ongoing legal procedures that have been covered in the mutual agreement procedure. The taxpayer also has the option to refuse the result.