The criminal tax fraud offence is defined by article 192 of the Moroccan Tax Code (MTC).
It is the use of any of the following means to evade tax liability or payment of tax or to obtain undue deductions or refunds of tax:
- issuing fictitious invoices;
- issuing or producing fictitious invoices;
- making false or fictitious accounting entries;
- selling without invoices repeatedly;
- removal or destruction of legally required accounting documents; or
- concealment of all or part of the company's assets or fraudulent increase in its liabilities with a view to organizing its insolvency.
Criminal proceedings are not triggered by a specific amount of tax fraud, but only by the fraudulent actions of taxpayers. These fraudulent actions are, among others, listed in Article 192 of the MTC (see Question 9).
Similar to Question 2, criminal proceedings are triggered only by the fraudulent actions of taxpayers.
In principle, in Moroccan criminal law the moral element is a necessary condition for the existence of the offence.
The same goes for tax offences, since Article 192 of the MTC specifies that the material element must have been established 'with a view to evading his status as a taxpayer'.
The spontaneous filing of a return has first of all an impact on the statute of limitations. As mentioned in Question 7, the statute of limitations is increased to 10 years (instead of four) where no tax return has been filed.
The good faith of the taxpayer and the spontaneous rectification can be appreciated in a negotiation with the administration, but this is not guaranteed.
The procedure for applying criminal sanctions to tax offences is provided for in Article 231 of the Moroccan Tax Code ("MTC").
This article provides that before any referral to a judge, the Minister of Finance, or his delegate, must submit the complaints to tax offences commission for opinion (commission des infractions fiscales). This commission is consulted in an advisory capacity. It is chaired by a magistrate and is composed of two representatives of the tax administration and two representatives of taxpayers.
Following this consultation, the public prosecutor (Procureur du Roi) must refer the complaint to the investigating judge.
The statute of limitations for criminal tax matters is provided for in Article 232 of the MTC.
In principle, Moroccan Tax Code sets a four year statute of limitations. However, this period is extended to 10 years where taxpayers have not filed a return.
The statute of limitations starts to run when the term for voluntary filing of the relevant tax return ends.
Pursuant to Article 192 of the MTC, in addition to the tax penalties provided for in this Code, tax fraud is punishable by a fine of between MAD 5,000 and MAD 50,000.
Article 192 of the MTC covers the following acts:
- issuing fictitious invoices;
- issuing or producing fictitious invoices;
- making false or fictitious accounting entries;
- selling without invoices repeatedly;
- removal or destruction of legally required accounting documents;
- concealment of all or part of the company's assets or fraudulent increase in its liabilities with a view to organizing its insolvency.
The offender shall be punished, in addition to the fine provided for above, by a prison sentence of one to three months.
In the event of a repeat offence, the penalty may be doubled.
To our knowledge, there is no such program that can mitigate the criminal liability of a company in Morocco.
There is no self-disclosure program at the moment. Taxpayers can always disclose themselves to the tax authorities, but there is no specific procedure for self-disclosure.
No such rule exists in Morocco.
The statute of limitations is interrupted by the notification of a tax audit. It is also interrupted by the sending of requests for information (Article 232 of the MTC).
The statute of limitation is suspended for the period between:
- the date on which the complaint is lodged with a tax commission and the expiry of the three month period following the date of notification of the decision taken by the said commission;
- the date on which the complaint is lodged with a tax commission and the expiry of the three month period following the date of notification of the decision taken by the said commission.
Yes, tax sanctions are independent of criminal sanctions.
Yes it possible to reach a settlement with the tax authorities. The amicable agreement, within the framework of the tax audit procedure, is the main way of collecting additional tax assessments.
The taxpayer may conclude a mutual agreement with the tax authorities in writing. This agreement must be signed by both parties and must contain the date of signature, the name and capacity of the signatories and the amount of the resulting bases and duties.
The agreement must also be accompanied by a letter from the taxpayer withdrawing from any appeal to the tax authorities, the commissions or the competent courts.
Both legal and natural persons can be prosecuted for tax fraud.
Yes. They can both be prosecuted, regardless of their nationality.
A company cannot be liable for amounts claimed to an employee/director.
Indeed, under Moroccan law it is not foreseen that a natural person can be criminally prosecuted in connection with the lack of payment of Company's taxes.
We are not in a position to comment on the evolution of the last five years. Criminal proceedings in tax matters are not frequent and the data are not public.