How Your Pension Works in Morocco: Transfers, Taxes, and Banking

If you are retiring to Morocco on a pension paid from abroad, one decision comes before everything else: how the pension arrives, because it decides both how easily you can move the money out again and whether you qualify for Morocco’s main tax relief on foreign pensions.

• Into a convertible dirham account, money you bring in can generally be sent out of Morocco again later, provided you kept the records.
• As a permanent transfer in non-convertible dirhams, the money is committed to Morocco. That is the condition for the 80% tax reduction described below.

You cannot have both on the same money, so decide deliberately, and take advice before making a transfer permanent. Whichever you choose, keep a record of every incoming transfer from the first one: your tax claim and any later transfer out both depend on them.

Choosing how your pension arrives

Morocco has exchange controls, managed by the Office des Changes, and the dirham is not freely convertible. Receiving money from abroad is easy. Sending it back out is where the rules apply, and that is what the account choice is really about.

A convertible dirham account is designed for money that comes from abroad. What you bring in can generally be paid back out again from the eligible balance, which keeps your options open if you might leave Morocco, travel a lot or have costs abroad.

A permanent transfer in non-convertible dirhams gives that up. In exchange, it is what qualifies a foreign pension for the 80% reduction on Moroccan tax. For a retiree who is settled here and will spend the pension here, the tax saving can matter more than the flexibility; for someone less certain, it may not.

Which suits you depends on your pension, your tax position at home and how settled you are. Whether and how to use both routes for different parts of your income is a question for a tax adviser who knows both countries, not something to work out at the bank counter.

Opening the account

The regulations allow foreigners to hold a convertible dirham account, but documents, fees and minimum balances are set by each bank, and branches of the same bank can differ. Ask for the document list and the tariff sheet before your appointment, and ask other foreign residents in your city which branch handles pension transfers smoothly. The bank account guide covers account types and what banks usually ask for.

Moving the money

Retirees use both transfer services and ordinary bank transfers. Which is cheaper depends on the amount, the currencies and each provider’s current fees and rate, so compare the total cost of your own transfer rather than relying on a typical figure. Some pension providers can also pay directly into a Moroccan account; ask yours.

A regular monthly transfer is the simplest routine, and it spreads your exposure to exchange-rate movements over the year rather than concentrating it on one date. The converter on this page shows what a sum is worth at a recent dated rate; the rate you actually get will be your provider’s.

How a foreign pension is taxed

Morocco applies two separate reliefs to a foreign-source pension, and almost every summary of this collapses them into one. They apply in order, and they do different things:

1. A flat-rate deduction on the taxable base. Before any tax is worked out, 70% is deducted from the portion of your annual gross pension up to 168,000 MAD, and 40% from any amount above that. What is left is the taxable base.
2. An 80% reduction on the tax due. Income tax is then calculated on that base, and 80% of the resulting tax is cut.

The 80% is a reduction in tax owed, not a second reduction in taxable pension income, and it is not automatic. It depends on the pension being transferred to Morocco permanently, in non-convertible dirhams, and on being claimed through an annual declaration.

A worked example. On a gross annual pension of 259,000 MAD: 70% of the first 168,000 MAD is deducted, leaving 50,400 MAD of that slice. The remaining 91,000 MAD is reduced by 40%, leaving 54,600 MAD. The taxable base is therefore 105,000 MAD rather than 259,000 MAD. Income tax is calculated on that 105,000, and the 80% reduction then cuts the tax bill itself by four fifths, provided you qualify and claim it.

We deliberately do not quote an effective tax rate. It depends on the current income tax scale and on your own figures, and it is a question for an accountant rather than a guide.

Claiming the 80% reduction

The reduction is not applied for you. It has to be claimed, every year.

To claim it you must:

• File the prior year’s global income declaration electronically through SIMPL-IR, by 2 March.
• Attach an attestation from the paying institution confirming the pension payments.
• Attach a bank certificate stating the amount received in foreign currency and its dirham equivalent on the date of transfer.

On that date: 2 March is the deadline the DGI set for the 2025 tax year. It is an annual administrative deadline rather than a fixed rule, and the DGI has moved it before. Reconfirm the current year’s date with the DGI rather than assuming this one carries forward.

The Moroccan taxes guide explains tax residence and the rest of the Moroccan system.

Moving money back out of Morocco

This is where exchange controls are felt. Money that arrived from abroad into a convertible account can generally be transferred out again from the eligible balance, but the bank will want to see where it came from, which is why the transfer records matter so much. Without them, a transfer out is slow and difficult.

A pension transferred permanently in non-convertible dirhams is a different case: it has been committed to Morocco, and you should not plan on being able to move it back out freely. That is the trade-off for the tax relief, and the reason to take advice before choosing it.