Morocco Reduces Maximum Interest Rate on Shareholder Loans

Morocco's Ministry of Economy and Finance has issued a decree reducing the maximum interest rate for loans granted by direct shareholders from 2.97% to 2.53% for 2016. Interest on loans exceeding that rate is non-deductible.

In addition to the interest rate limitation, Morocco also disallows the deduction of interest expense for loans from shareholders if the capital of a company has not been fully paid in and applies a debt-to-equity ratio limitation of 1:1.