It all started from the declarations made by these promoters at the tax counters in Casablanca and Marrakech. Tax inspectors suspect manipulation of tax declarations and blocking of the “prior notice” mechanism provided for by article 234 bis of the General Tax Code. The “projects concerned are mainly located in residential areas whose town planning has been modified, in particular those where villas have been converted into residential buildings”, reports Hespressindicating that these transformations “were closely scrutinized by the tax authorities”. The latter noted serious inconsistencies in the declarations of the sale prices of real estate.
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Tax auditors discovered that property prices declared by developers were often well below market reference prices, reviewed regularly by the General Directorate of Taxes (DGI) and the National Agency for Land Conservation, Cadastre and of Cartography. These real estate developers would have discreetly imposed undeclared amounts on clients, under dubious titles. This fraud has intensified in recent months, causing land prices to soar and the costs of construction materials and labor to increase, particularly in the luxury housing sector. Additionally, the absence of new high-end properties on the market, particularly in Casablanca and Marrakech, where demand remains extremely high, has worsened the situation.
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Some real estate developers have directed their clients to specific notaries. A way to circumvent the provisions of Law No. 31-08 relating to consumer protection. They are also accused of violating the rules by failing to request a “prior opinion” from the tax authorities before concluding sales, a procedure supposed to guarantee the tax transparency of transactions. They have in fact used their dominant position in the market to push customers to give up this crucial step, under the pressure of rapid decisions linked to the scarcity of goods. Customers have also complained about this to the tax services.
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Other real estate developers have allegedly laundered funds that must be paid to the Moroccan tax authorities. “In addition to the main sales contract, they require their customers to sign additional contracts, for “additional finishing work” or “materials to order”, which can represent up to 25% of the value of the property “. They did not disclose these contracts to the tax authorities.
Morocco
