Moroccan holding loses tax battle over French dividends

This update focuses on Moroccan holding France. A recent French court ruling against a Moroccan holding company sends a clear warning to entrepreneurs based in Morocco, including Moroccans living abroad, about how tightly taxation of cross-border dividends between France and the Kingdom is controlled.

Moroccan holding France: what to know

Sauret Consultants Holding Offshore, a Moroccan holding company, had been receiving dividends for several years from a French company.

Between 2019 and 2021, France withheld €38,513, then €43,754, then €24,863 at source. In total, €107,130 were taken from these dividends.

The Moroccan company argued that these amounts should be refunded. It relied on the tax treaty between France and Morocco, which allows dividends to be exempt from French tax when they are effectively taxed in Morocco.

After two refusals from the French tax administration, the company brought the case before the Montreuil administrative court, then before the Paris administrative court of appeal.

Why the France–Morocco tax treaty did not apply

In its ruling dated 30 April 2026, the Paris administrative court of appeal confirmed the French withholding tax on the dividends.

The dispute did not concern the Moroccan residence of the company, which was accepted, but the exact nature of its taxation in Morocco.

Sauret Consultants was governed by the former Moroccan legislation on offshore financial centres. For its first fifteen years, it paid a fixed annual tax of about 5,000 US dollars, which was deemed to discharge all other taxes on its profits and income.

For the court, this flat tax cannot be treated as the corporate income tax referred to in the France–Morocco tax treaty. In other words, France considered that the dividends were not genuinely subject to a tax comparable to corporate tax in Morocco.

The consequence is clear: the Moroccan holding company cannot benefit from the treaty exemption, and the €107,130 remain definitively collected by the French tax authorities.

A warning for MRE entrepreneurs and investors

This case is directly relevant to Moroccans living abroad who own a company in Morocco or are planning to set one up to invest in France or elsewhere in Europe.

It shows that the mere existence of a tax, especially a flat one, is not always enough to benefit from bilateral tax treaties. Foreign authorities examine the substance of the tax paid in Morocco.

• A very light or flat regime can be judged not comparable to a standard corporate income tax.
• Withholding taxes on dividends, interest or royalties may then remain payable abroad.
• Structures relying on old offshore regimes are particularly scrutinised.

For MREs who combine residence in Europe with business activities in Morocco, this decision is a reminder to check carefully:

– the Moroccan tax regime of their company;
– the provisions of the tax treaty between Morocco and the country of residence;
– the conditions for claiming a refund or a credit for foreign withholding tax.

Planning ahead before structuring cross-border investments

For a Moroccan holding operating in France, as in this Moroccan holding France case, poorly calibrated tax optimisation can prove very costly. Here, a US$5,000 flat tax ended up costing €107,130 in lost dividends.

MRE entrepreneurs who plan to channel their European investments through a Moroccan structure should seek advice from tax specialists who understand both systems.

They should also review the detailed provisions of the France–Morocco tax treaty and recent case law commentary, to avoid discovering too late that their company does not meet the required conditions.

For their broader plans involving travel back to Morocco, setting up a business at home or preparing retirement in the Kingdom, they can also consult Canal212’s practical guide to key procedures for Moroccans living abroad, updated on a regular basis.

For more context, readers can follow Canal212 news for Moroccans abroad.

For official updates, readers can check the relevant official source.