Morocco Cracks Down on Dormant Companies with Fines and Legal Action

Moroccan tax authorities are cracking down on dormant companies, known as "Entreprises dormantes," by issuing official notices to their administrators and owners to settle their tax and legal status. This move comes after identifying significant accumulated fines and financial penalties, ranging from 40,000 to 100,000 dirhams, for non-compliance with accounting and declaration obligations, despite these entities maintaining their legal personality in official records.

The tax services' action is particularly focused on companies in the Rabat-Casablanca axis that have been flagged as high-risk due to their inactivity. Many of these companies have failed to submit regular tax declarations, maintain legal accounting records, hold annual general meetings, or complete legal filings.

Tax collection and auditing teams are now employing a procedure of automatic tax assessment for delinquent companies, referencing specific articles of the General Tax Code. This is especially relevant for those who did not take advantage of the tax settlement initiative that concluded in 2024. Administrators have a 30-day window from receiving the notice to declare cessation of activity to be registered as inactive and halt tax proceedings.

Recent audits have uncovered suspicious changes in the commercial records of many dormant companies, including the transfer of ownership and the removal of former administrators and owners. These actions are seen as attempts to circumvent tax settlement procedures and may indicate networks exploiting inactive companies for illegal purposes. Intermediaries have also been found to be exploiting the ignorance of company administrators, offering to facilitate ownership transfers for sums starting from 10,000 dirhams to avoid tax liabilities and complex deregistration processes.

In response to these findings, tax auditing teams are coordinating with the legal affairs department to refer cases of companies involved in suspicious transactions, such as producing fake invoices and manipulating tax declarations, to the judicial authorities. These activities have resulted in significant losses for the public treasury.