The Organisation for Economic Co-operation and Development (OECD) has recently endorsed Morocco's legal and administrative framework concerning tax transparency and oversight of multinational corporations. This endorsement follows a comprehensive international assessment confirming the Kingdom's compliance with established tax reporting standards by country. These efforts are part of a global initiative aimed at combating tax evasion, tax base erosion, and profit shifting to jurisdictions with lower tax rates. However, this positive evaluation also revealed a persistent gap in Morocco's system for automatic exchange of tax information with partner countries, despite the Kingdom having completed the necessary internal procedures for implementing this process.
According to the 2026 Peer Review report published by the OECD as part of the joint project with the G20 on combating base erosion and profit shifting (BEPS), Morocco received only one recommendation regarding the completion of the international framework for exchanging tax declarations for multinational groups. This comes in contrast to the confirmation of its adherence to all requirements linked to national legislation, administrative procedures, and the appropriate use of tax information.
Challenges in International Tax Information Exchange
The report highlighted that Morocco lacks any activated bilateral agreements for exchanging country-by-country reports (CbCR), hindering the effective operation of automatic exchanges with foreign tax administrations. It indicated that the current situation necessitates the establishment and activation of qualified agreements between the competent authorities of the involved countries, thereby ensuring the transfer of data under conditions of confidentiality and information protection, specifically for tax purposes.
The OECD noted that Morocco has faced a consistent recommendation since the 2019-2020 peer review cycle, with no changes in its content, despite progress made in preparing the necessary mechanisms and written procedures for information exchange. The report distinguished between the readiness of Morocco's internal framework and the incomplete international relations required to activate the exchange of reports, emphasizing that while Morocco has established necessary procedures to ensure compliance with international standards, the qualified agreements between tax authorities remain an unfulfilled part of the system.
This evaluation reflects that country-by-country reporting is one of the essential tools enabling tax administrations to track the distribution of activities, profits, and taxes paid by multinational groups across different countries. Consequently, activating these exchanges is crucial for Morocco to benefit from international tax cooperation mechanisms.
In terms of the scope of this reporting system, the report clarified that the obligation to file country-by-country tax reports applies to multinational groups with a consolidated annual turnover exceeding 8 billion Moroccan dirhams (approximately $800 million) for financial years beginning on or after January 1, 2021. The established rules set a deadline for submitting reports within 12 months after the end of the relevant financial year, allowing for submissions via the alternative parent company while suspending the obligation for local filing in Morocco.
The organization confirmed that Morocco's legal and administrative rules regarding this system have remained unchanged and that their implementation meets all internationally recognized benchmark requirements. The first assessment of Morocco's legislative framework in this area was conducted during the 2020-2021 cycle, and the 2026 review found no new recommendations regarding internal legislation or mechanisms for the appropriate use of data, reflecting the stability of the regulatory framework established for monitoring tax declarations of large economic groups.
Future Steps Towards Enhanced Tax Transparency
Country-by-country tax reports allow tax administrations to access detailed data regarding the distribution of multinational groups' turnover and profits before tax calculations, as well as information on tax amounts owed and actually paid, employee numbers, capital, undistributed profits, and tangible assets in each jurisdiction where these groups operate. This data is particularly relevant for analyzing risks associated with transfer pricing among subsidiaries, revealing instances of disproportionate profits relative to actual economic activities in the relevant countries. Additionally, it aids tax administrations in identifying cases requiring in-depth audits, especially when profits are concentrated in specific jurisdictions despite significant turnover or a large workforce in other countries.
According to the established international framework, the ultimate parent company of a multinational group is responsible for filing the report with the tax administration in its country of residence, which then automatically exchanges this information with the tax administrations of countries where the group has taxable entities. This exchange is governed by international agreements that facilitate the transfer of tax information, as well as specific arrangements between the competent authorities that define the technical and legal conditions for such exchanges.
In this context, the OECD has recommended that Morocco take the necessary measures to establish effective agreements with member countries under the comprehensive framework for combating base erosion and profit shifting, provided they meet requirements for confidentiality, consistency, and appropriate use of information. Activating these agreements is essential for transitioning Morocco from a phase of legal and administrative compliance to the actual implementation of cross-border automatic tax reporting exchanges.
On an international level, the assessment results, which encompassed 142 countries and jurisdictions, revealed that over 120 of them have included the mandatory country-by-country tax reporting in their national legislation. Furthermore, 110 jurisdictions have established bilateral or multilateral agreements between the relevant tax authorities, allowing for the exchange of information regarding multinational groups' activities. This data enhances Morocco's standing compared to similar economies, while simultaneously highlighting the existing practical gap between its ready legislative framework and incomplete bilateral relations.
The report also noted general recommendations directed at 19 jurisdictions to complete their legal and administrative frameworks, while 25 jurisdictions received recommendations to improve specific aspects of their systems. Moreover, 106 jurisdictions underwent evaluations related to information confidentiality and data protection, without the Global Forum on Transparency and Exchange of Information for Tax Purposes recommending corrective action plans for them; however, 94 jurisdictions provided detailed data that sufficiently verified the availability of guarantees for the appropriate use of tax declarations.
These reviews are part of an annual evaluation mechanism aimed at measuring countries' commitment to implementing the minimum international standards for tax transparency and ensuring a level playing field for monitoring multinational groups. This mechanism seeks to mitigate practices that enable profit shifting to low-tax jurisdictions without sufficient connection to actual economic activities and to enhance tax administrations' ability to monitor cross-border risks.
The latest evaluation presents Morocco with the challenge of completing the practical aspects of its engagement in the international tax transparency system, having received a positive assessment of its legal and administrative framework without corrective recommendations. The activation of bilateral relationships for exchanging tax declarations remains the crucial next step within this standard, enabling the Moroccan tax administration to benefit from international information regarding multinational groups and enhancing the effectiveness of risk analysis related to profit distribution and activities among countries.
As reported by hespress.com.
