Accounting and tax

Tax obligations in Madagascar

  1. The standard rate of corporate tax in Madagascar is 20%. For a company running at a loss, a minimum tax rate of US$120 plus 0.5% of the turnover from the preceding year applies;
  2. The tax year in Madagascar is either i) the calendar year ending on 31st December or ii) a fiscal year ending on 30th June. All companies must file annual tax returns either by 15th May of the subsequent year or by 15th November of the same year respectively;
  3. Companies within the Free Zones are exempt from corporate tax for the first 5 years of operations, after which a reduced corporate tax rate of 10% is levied;
  4. Branches pay a corporate tax rate of 20% and there is no withholding tax on branch remittances;
  5. The standard VAT rate levied on provision of goods and services and on imports in Madagascar is at a rate of 20%. Business entities that have an annual turnover of less than US$100,000 are not liable to VAT. All VAT returns must be filed monthly;
  6. Capital gains derived from the sale of capital assets are taxed at the standard corporate rate of 20% in Madagascar;
  7. Withholding tax is levied in Madagascar on i) interest paid to a non-resident at the rate of 20% and ii) royalties paid to a non-resident at the rate of 10%. There is no withholding tax levied on dividends;
  8. Tax losses can be carried forward for up to five years;
  9. Employers must submit to the relevant authorities i) payroll tax at graduated rates upto 20% of taxable gross salary, ii) social security tax at the rate of 13% towards the state pension scheme;
  10. Exchange-control regulations exist in Madagascar where i) current operations which include financial remittances abroad and these require a declaration to a bank in Madagascar and ii) capital operations including stock transfers, shares of liquidation bonuses, sale of businesses or assets and compensations for expropriations and these require authorization from the Ministry of Finance;
  11. Madagascar has signed withholding tax treaties with only two countries which are France and Mauritius;
  12. Healy Consultants Compliance Department will assist our Clients with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparation of financial accounting records and iv) preparing forecasts, budget and sensitivity analysis;
  13. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.

Contact us

For additional information on our accounting and tax services in Madagascar, please contact our in-house country expert, , directly: