The following activities benefit from a special tax and/or customs regime:
Microfinance benefits are available for entities specialising in lending money on the basis of small or medium scale value. Entities duly licensed to practise microfinance activities are exempt from CIT during the first five years. After this period, the microfinance company is subject to CIT at a rate of 20%.
Free zone (free trade zone)
Free zone law is available for industrial and other service providers that export all of their products. If eligible under the free zone law, a CIT exemption is provided during the first two to five years and a reduced CIT of 10% is levied thereafter. Exemption from customs duties on importation is also provided.
Companies investing in renewable energy, tourism, industrial, civil work and construction, and transformation
Companies investing in renewable energy, tourism, industrial, civil work and construction, and transformation can benefit from a tax reduction equal to the tax calculated on 50% of the amount of investment that they realised during the related tax year. The right to reduction that can be used for the tax year cannot exceed 50% of tax actually due. The balance is carried forward with the same limitation to subsequent years, until clearance.
Big investment mining
A mining company committing to invest more than 50 million United States dollars (USD) is considered a big investment mining company. The big investment mining law provides a minimum income tax exemption, a reduced CIT rate for the transformation entity (i.e. the entity in charge of processing the extracted minerals), exemption from custom and importation duties, and VAT reimbursement on locally purchased equipment and investments.
The petroleum code provides a custom and importation duties exemption for hydrocarbon research, exploration, and exploitation activities.
The leasing law provides that leasing activities can benefit from CIT exemption and reduction of tax rate during the first four years.
Foreign tax credit
Except under a tax treaty, there is no foreign tax credit rule under Malagasy tax law.