On November 13, 2025, Morocco’s Council of Government approved Decree No. 2.22.1020, establishing detailed transfer pricing documentation requirements for multinational enterprises operating in the country. This regulatory text, presented by Minister of Economy Nadia Fettah Alaoui, marks the practical implementation of documentation obligations first introduced in the 2020 Finance Law.
For foreign investors with Moroccan subsidiaries, this decree creates immediate compliance obligations. Companies meeting certain revenue thresholds must now maintain structured documentation following OECD Base Erosion and Profit Shifting (BEPS) Action 13 standards.
Morocco transfer pricing
Morocco transfer pricing
Morocco transfer pricing
Morocco transfer pricing
Morocco transfer pricing
Morocco transfer pricing
Morocco transfer pricing
Morocco transfer pricing
Morocco transfer pricing
Legal Framework: Decree 2.22.1020
The decree implements Articles 213 and 214 of Morocco’s General Tax Code (Code Général des Impôts). While the Finance Law established the principle of transfer pricing documentation in 2020, the absence of implementing regulations created uncertainty about practical requirements. Decree 2.22.1020 closes this gap by specifying exact documentation formats, content requirements, and submission procedures.
The regulatory framework aligns with international standards established by the OECD’s BEPS project. Morocco has committed to implementing BEPS Action 13 recommendations, which require multinational groups to prepare three levels of documentation: Master File, Local File, and Country-by-Country Report.
Three-Tier Documentation Structure
Master File Requirements
The Master File provides tax authorities with an overview of the multinational group’s global business operations and transfer pricing policies. Under Moroccan law, this document must contain:
- Organizational structure of the multinational group
- Description of business activities
- Intangible assets owned by the group and their legal ownership
- Intercompany financial activities including financing arrangements
- Financial and tax positions of the group
Moroccan subsidiaries of foreign groups must obtain the Master File from their parent company. The document must be available in French or Arabic.
Local File Obligations
The Local File focuses specifically on transactions between the Moroccan entity and related parties. Required content includes:
- Detailed description of the Moroccan entity’s management structure
- Detailed business description including business strategy
- Key competitors in the Moroccan market
- Financial information for the Moroccan entity
- Functional analysis identifying significant risks assumed and assets employed
- Selection and application of transfer pricing methods
- Comparability analysis supporting the selected method
The Local File must demonstrate that intercompany transactions comply with the arm’s length principle established in Article 213 of the Tax Code.
Country-by-Country Reporting (CbCR)
Groups with consolidated revenue exceeding MAD 8.12 billion must file Country-by-Country Reports. This requirement applies to ultimate parent entities of multinational groups. Moroccan subsidiaries of foreign groups must either:
- File the CbCR if designated by their parent company, or
- Notify Moroccan tax authorities that the parent entity files the report in another jurisdiction
Need help determining your documentation obligations? Our tax litigation team reviews your corporate structure and provides a compliance assessment. Contact Cabinet Lafrouji Avocats at +212 (5) 22 47 55 29.
Threshold Triggers for Documentation
Two separate thresholds determine documentation requirements:
Standard Transfer Pricing Documentation (Master File + Local File): Companies must prepare documentation if they meet either condition:
- Annual revenue exceeds MAD 50 million, OR
- Gross assets exceed MAD 50 million
Country-by-Country Reporting: Mandatory for multinational groups with:
- Consolidated annual revenue exceeding MAD 8.12 billion
These thresholds apply to the fiscal year. Companies crossing these limits must immediately begin maintaining required documentation.
Submission Timeline and Procedures
The decree establishes a demand-based system rather than automatic annual filing. Moroccan tax authorities may request transfer pricing documentation during audits or reviews. Once requested, companies have 30 days to provide complete documentation.
This short deadline creates practical challenges. Companies cannot wait for a formal request to begin preparation. Documentation must be maintained on an ongoing basis and updated annually.
For Country-by-Country Reports, filing deadlines follow the parent company’s fiscal year-end. Reports must be submitted within 12 months following the last day of the reporting fiscal year.
Penalties and Enforcement
Decree 2.22.1020 establishes significant penalties for non-compliance:
Documentation Deficiencies:
- Minimum penalty of MAD 200,000 per fiscal year for failure to maintain required documentation
- Additional penalty of 0.5% of the value of undocumented transactions
- Maximum combined penalty cannot exceed MAD 1 million per fiscal year
Country-by-Country Reporting:
- MAD 500,000 penalty for failure to file CbCR when required
- MAD 500,000 penalty for filing incomplete or inaccurate reports
These penalties apply automatically. Tax authorities have no discretion to reduce or waive them based on good faith compliance efforts.
Recent Enforcement Actions
Morocco’s tax administration has intensified transfer pricing audits. In 2024, authorities completed a significant adjustment on a multinational consumer goods group, resulting in additional tax assessments exceeding MAD 1 billion. This case involved challenges to the group’s cost allocation methodology and royalty payments to foreign affiliates.
The tax authority’s approach focuses on:
- Functional analysis accuracy
- Comparability studies using Moroccan or regional data
- Substance requirements for service fees
- Justification of royalty rates
Companies under audit have reported aggressive positions by tax inspectors, particularly regarding management fees and technical assistance charges.
Advance Pricing Agreements (APAs)
Morocco’s tax code permits taxpayers to request Advance Pricing Agreements covering transfer pricing methodologies. APAs provide certainty by obtaining pre-approval of transfer pricing methods for specific transactions.
The APA process involves:
- Formal application to the tax administration
- Negotiation of the pricing methodology
- Agreement validity for up to four fiscal years
- Annual compliance reporting
APAs reduce audit risk but require significant preparation time. The tax administration typically requires 12-18 months to conclude APA negotiations.
Practical Compliance Steps
Multinational groups with Moroccan operations should implement the following measures:
Immediate Actions:
- Calculate revenue and asset thresholds to determine documentation requirements
- Request Master File from parent company if within scope
- Identify all intercompany transactions requiring documentation
Ongoing Compliance:
- Maintain annual functional analysis updates
- Document selection of transfer pricing methods with supporting benchmarking
- Prepare Local File within 30 days of fiscal year-end
- Retain supporting documentation for six years (general tax statute of limitations)
Risk Management:
- Review existing intercompany agreements for arm’s length compliance
- Evaluate APA opportunities for high-value or complex transactions
- Consider documentation quality, not just completion
- Monitor tax authority guidance and audit trends
Comparability Analysis Challenges
The decree requires benchmarking studies to support transfer pricing methods. However, Moroccan companies face practical difficulties:
- Limited availability of detailed financial data for Moroccan comparables
- Small sample sizes in specialized industries
- Reliance on European or broader regional datasets
- Tax authority preference for local comparables when available
Companies should document their comparability search strategy and explain why foreign comparables provide appropriate benchmarks when Moroccan data is insufficient.
Impact on Foreign Investment Structures
Decree 2.22.1020 affects investment structuring decisions. Companies should consider:
Financing Structures: Intercompany loans require arm’s length interest rates supported by benchmarking. Tax authorities scrutinize debt-to-equity ratios and interest deductibility.
Intellectual Property: Royalty payments to foreign affiliates face detailed scrutiny. Documentation must establish:
- Legal ownership of IP
- Development costs and value creation
- Arm’s length royalty rate
- Benefit to the Moroccan entity
Service Arrangements: Management fees and technical assistance charges require clear demonstration of services rendered and benefits received.
Coordination with Tax Treaties
Morocco has signed over 50 double taxation treaties. Transfer pricing disputes may trigger mutual agreement procedures under treaty provisions. However, strong documentation reduces the likelihood of disputes reaching this stage.
The decree’s alignment with OECD standards facilitates resolution through competent authority procedures when disputes arise.
Ensure Transfer Pricing Compliance with Expert Legal Support
Transfer pricing compliance requires careful legal analysis of intercompany arrangements, thorough documentation preparation, and proactive risk management. Non-compliance exposes companies to significant penalties and prolonged tax audits.
Cabinet Lafrouji Avocats provides comprehensive transfer pricing advisory services:
- Compliance assessment: Review your corporate structure and determine documentation obligations under Decree 2.22.1020
- Documentation preparation: Prepare Master Files, Local Files, and support benchmarking studies that meet Moroccan requirements
- Audit defense: Represent clients during tax audits involving transfer pricing challenges
- Advance Pricing Agreements: Negotiate APAs with Moroccan tax authorities to secure pricing method approval
- Controversy resolution: Handle transfer pricing disputes through administrative appeals and litigation
Our team has extensive experience advising multinational corporations on Moroccan transfer pricing compliance and defending against tax authority adjustments.
Contact us for a confidential consultation:
Cabinet Lafrouji Avocats
64 rue Taha Houssein
20000 Casablanca – Maroc
Telephone: +212 (5) 22 47 55 29
Email: contact@lafroujiavocats.com
Disclaimer: This article provides general information about Moroccan transfer pricing regulations and does not constitute legal advice. Companies should consult qualified legal counsel to assess their specific obligations under Decree 2.22.1020.
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