Group restructurings: a tax neutrality regime that is easier to access but narrower in scope

Since 2017, article 161 bis-I of the General Tax Code (CGI) has allowed fixed assets to be transferred between companies in the same group without any immediate effect on taxable profit. The Finance Act (Loi de Finances) 2025 reformed this regime for transfers made from 1 January 2025. The Directorate General of Taxes (DGI) set out the new rules in its circular No. 736 (note circulaire).

1. Ownership threshold lowered to two thirds

The regime requires a group built around a parent company that continuously holds, directly or indirectly, a minimum share of its subsidiaries’ capital. This threshold falls from 80% to two thirds.

Groups that have already been declared can bring in new subsidiaries held at least two thirds, or reduce their stake in existing subsidiaries down to that threshold, provided they meet the reporting obligations.

2. Only transfers paid for in shares remain eligible

Before 2025, any transaction involving a transfer of ownership was covered, including a sale for cash. Now only transfers made in exchange for shares in the receiving company (contributions) are eligible.

There is also a new condition: the shares received must not be sold, cancelled or contributed to a company outside the group.

3. Choice of valuation method

Companies can now choose between:

• fair value at the date of transfer: the contributing company recognises the capital gain, but payment of the related corporate income tax (IS) is deferred;
• net book value (NBV): the receiving company takes over the contributor’s original cost, depreciation and provisions, and continues to depreciate on the original cost. No capital gain is recognised.

4. From deferred taxation to deferred payment

With fair value, the net capital gain is included in taxable profit for the year, but the related IS, calculated at that year’s rate, is not paid straight away. In the accounts, this deferred tax is provided for (account 1551 “Provisions for taxes”), with no tax deduction.

The deferral ends, and the tax becomes payable, in particular if the shares received are sold (pro rata for a partial sale) or if the conditions are no longer met. The tax is then paid by the company, without assessment, within three months of the end of the financial year concerned.

Example

In a declared group, subsidiary A contributes a building to subsidiary B on 1 January 2025. The building was acquired in 2016 for 11 million dirhams (MAD) (land 4 million, buildings 7 million depreciated at 4%). In exchange, A receives shares in B.

	Original cost	NBV	Fair value	Capital gain
Land	4,000,000	4,000,000	10,000,000	6,000,000
Buildings	7,000,000	4,480,000	12,000,000	7,520,000
Total	11,000,000	8,480,000	22,000,000	13,520,000

• Fair value option: A includes a 13.52 million capital gain. Payment of the related IS is deferred. B depreciates the buildings, but for tax purposes deducts only the charges calculated on the original cost.
• NBV option: no capital gain. B records the building at its original cost of 11 million with A’s accumulated depreciation, and continues to depreciate on that basis.

Watch the threshold effect: if the capital gain takes the year’s profit to 100 million dirhams or more, the higher rate for large companies applies for that year.

5. Reporting obligations

Within three months of the end of the financial year of the transfer, the companies concerned file the statement required by article 20 bis of the CGI. It shows in particular the original cost, the value used, the NBV, the fair value, the deferred IS and the value of the shares received. Any later sale of the shares must be reported to the tax office.

Key points

• More groups are eligible thanks to the two-thirds threshold.
• No more tax-neutral intra-group sales: a sale for cash is now taxed under the ordinary rules.
• A strategic choice between fair value and NBV, which determines future depreciation and exposure to the deferred IS.
• Registration duties (droits d’enregistrement) need to be checked separately: the Finance Act 2025 also clarified the duties that apply to these transactions.

Model any restructuring before you sign. Our Tax & legal and Audit & assurance teams support groups through these transactions. To discuss your plans, contact us.