🇲🇬 Madagascar Tax Guide — Income, Corporate & VAT Rates

Tax rates in Madagascar range from 10% to 30% for personal income, with a corporate tax rate of 20%, and a value-added tax (VAT) rate of 20%.

Tax System Overview

Madagascar has a territorial taxation system, where residents are taxed on their worldwide income, but non-residents are only taxed on income derived from Madagascar. The country considers an individual a tax resident if they have a permanent home in Madagascar, spend more than 183 days in the country in a calendar year, or have their center of economic interests in Madagascar. This means that individuals who live and work in Madagascar for an extended period will be subject to tax on their worldwide income, while those who only have income derived from Madagascar will only be taxed on that specific income.

The tax system in Madagascar is governed by the Tax Code, which outlines the rules and regulations for taxation in the country. The Tax Code is administered by the Ministry of Finance and Budget, which is responsible for collecting taxes and ensuring compliance with tax laws. The tax year in Madagascar runs from January to December, and taxpayers are required to file their tax returns by the end of March of the following year.

Personal Income Tax

Corporate & Business Tax

• The corporate tax rate in Madagascar is 20%, which applies to all companies, including small businesses and large corporations.
• Small businesses with an annual turnover of less than MGA 50 million are eligible for a reduced corporate tax rate of 15%.
• Madagascar has several free zones, including the Antananarivo Free Zone and the Toamasina Free Zone, which offer tax incentives and other benefits to companies that operate within these zones.
• Companies that operate in Madagascar are required to register with the tax authorities and obtain a tax identification number.
• Companies are also required to file their tax returns electronically and pay any outstanding tax liability by the end of March of the following year.

VAT / Sales Tax

• The standard VAT rate in Madagascar is 20%, which applies to most goods and services.
• A reduced VAT rate of 10% applies to certain goods and services, such as basic foodstuffs and pharmaceuticals.
• Some goods and services are exempt from VAT, including healthcare services and educational services.
• Madagascar has a tourist refund scheme, which allows tourists to claim a refund of VAT on certain purchases made during their stay in the country.

For Expats & Foreign Workers

• Expats and foreign workers who are tax residents in Madagascar are subject to tax on their worldwide income, including income from foreign sources.
• Madagascar has double taxation treaties with 12 countries, including France, Mauritius, and South Africa, which can help to reduce the tax liability of expats and foreign workers.
• Expats and foreign workers are required to register with the tax authorities and obtain a tax identification number.
• Expats and foreign workers may be eligible for a foreign earned income exemption, which can help to reduce their tax liability.
• Expats and foreign workers are also required to comply with social security regulations, including making contributions to the social security fund.
• Expats and foreign workers may be subject to remittance rules, which require them to remit a portion of their income to their home country.

Crypto & Investment Income

• Investment income, including dividends, interest, and capital gains, is subject to tax in Madagascar.
• Cryptocurrency is considered a taxable asset in Madagascar, and gains from the sale of cryptocurrency are subject to capital gains tax.
• Dividends received from foreign sources are subject to tax in Madagascar, but may be eligible for a foreign tax credit.
• Interest income from foreign sources is also subject to tax in Madagascar, but may be eligible for a foreign tax credit.
• Taxpayers are required to declare their investment income on their tax return, and may be subject to penalties and interest if they fail to do so.