Blueprint for Business Cessation: A 2023 Perspective
A Three-Step Strategy
With the close of another fiscal year on the horizon, several companies are slated to cease operations by the year 2023. To facilitate this transition, a comprehensive three-step strategy has been outlined to ensure a smooth and systematic closure of operations. This procedure is not only mandatory but is also designed to prevent any future liabilities that might arise post-cessation of activities.
Step One: Declaration of Cessation of Activity
The first step requires companies to electronically subscribe to a declaration of total cessation of activity during 2023. This declaration serves as an official statement of intent, informing the relevant authorities of their decision to halt all business operations. This step is not just a formality, but a legal obligation that prepares the way for the subsequent steps in this strategy.
Step Two: Lump-Sum Payment
Following the declaration, companies are required to spontaneously pay a lump-sum amount of 5,000 dirhams. This amount can either be paid as a corporation tax or income tax, depending on the case. Unique to this strategy is the requirement for this payment to be made for each non-prescribed financial year. This means that even if a company has not been in operation during a particular financial year, this payment remains obligatory. This step underscores the financial responsibilities that companies still bear, regardless of their operational status.
Step Three: Document Submission and Removal Request
The final step in the cessation strategy requires companies to present all documents that justify their removal from the commercial register to the tax service they belong to. In addition to this, companies must also submit a request for removal from the professional tax. This step ensures that companies will not be liable for any future tax obligations once they have ceased their operations.
Procedure Details: Circular Note N°733
Further details regarding the aforementioned three-step strategy can be found in Circular Note N°733. This note, containing the comprehensive procedure for cessation of operations, is published on the official portal of the General Directorate of Taxes. Companies planning to cease their operations can easily access this note at www.tax.gov.ma.
The Key to a Smooth Transition
The message is clear for companies planning to cease their operations by 2023: completion of all necessary steps is crucial to avoid any future liabilities. Officially declaring their cessation of activity, paying a lump-sum tax amount for each non-prescribed financial year, and providing all necessary documents for removal from the commercial register and professional tax are steps that can’t be missed. Adherence to these steps will not only ensure a smooth transition but will also prevent any potential legal issues that could arise from an unplanned or hasty closure of operations.
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