Presenting Christ to Muslims: Christian Theologians in Dialogue with Muslims - Learning Arabic


On 10 August 2017, Morocco published a decree concerning the conclusion of advance pricing arrangements (APA) for transfer pricing purposes as approved by the Moroccan Council of Ministers (the Decree). The Decree sets out the general conditions for entering into an APA and the required information to be included in an APA application. The Decree is available in Arabic and French.


An APA is an arrangement that determines, in advance of cross-border intercompany transactions, an appropriate set of criteria (e.g. method, comparables and appropriate adjustments thereto, critical assumptions as to future events) for the determination of the transfer pricing for those transactions over a fixed period of time. An APA is formally initiated by a taxpayer and requires negotiations between the taxpayer and tax administration. APAs are most useful when traditional mechanisms fail or are difficult to apply. APAs provide a greater level of certainty and may prevent transfer pricing disputes.

The possibility to enter into an APA with the Moroccan Tax Administration was introduced in the Budget Law for 2015. Moroccan companies can request the Tax Administration to enter into an APA with respect to the future treatment of its cross-border intercompany transactions for a period not exceeding four years.

Although the Tax Administration cannot challenge the transfer pricing method that has been agreed under an APA, it can be declared null and void during a tax audit in any of the following circumstances:

  • Misrepresentation of facts;
  • Concealment of information;
  • Failure to comply with the agreed method and obligations contained in the APA; or
  • Fraudulent application of the agreed method.

Overview of the new Decree

The publication of the Decree governing the arrangements for the conclusion of APAs clarifies the general conditions for entering into an APA as well as information to be provided by applicants.

Tax Administration allows taxpayers to hold a meeting prior to the filing of an APA application to examine the conditions under which the APA may be concluded. In particular, this may include agreement on the type and nature of the information necessary for the analysis of the transfer pricing policy, the provisional timetable for meetings, as well as questions on how to conclude the APA.

An APA application must be submitted at least six months before the start date of the first financial year to which the APA applies.

An application for an APA must specify the associated companies in connection with the application, transactions and the period covered by the application, as well as the proposed transfer pricing methodology and critical assumptions made. In addition, an application must be accompanied by a number of supporting documents, including, but not limited to:

  • the organizational structure of the group;
  • the company’s / group’s strategy (business plan);
  • the financial statements and tax returns of the associated companies certified by the competent authorities and covering the last four financial years;
  • description of functions performed, assets used and risks assumed by associated companies;
  • description of the industry and the business area(s) of associated companies and of all controlled transactions;
  • contractual agreements between the associated companies;
  • agreements for the allocation of costs between associated companies;
  • APAs concluded by the applicant with other foreign authorities;
  • comparability analysis as well as any conditions for adjustments.

Once the APA has been obtained, an annual report must be submitted to the Tax Administration containing the following information:

  • A detailed statement of the calculation of the transfer prices provided for in the APA;
  • A summary statement of any changes in the conditions / assumption made with respect to the transactions covered by the APA;
  • A copy of the organizational structure of all associated companies and their legal relationships and the distribution of the capital of such companies;
  • A copy of the annual report of the associated companies.

Next steps to be taken

Taxpayers that have transactions with associated companies or which are planning on entering into an arrangement with related persons and would like to get certainty on the treatment of their transfer pricing methodologies may apply for an APA. However, taxpayers should assess whether all the information to be accompanied with the application is readily available.

Graphene Economics™ would be happy to have discussions with multinationals operating in Morocco to provide further insight regarding these new regulations and together with its network of partners provide guidance on the next steps should the multinational company choose to pursue an APA.

For more information, please contact: