Taxation of residents
Resident corporate entities are subject to corporate income tax (CIT) based on realised worldwide income.
A corporate entity having an annual turnover of less than MGA 200 million is subject to CIT at a rate of 5% of 70% of turnover, with a minimum tax of MGA 16,000 to MGA 150,000 depending on the activities.
A tax reduction of 2% of the amount of purchases of goods and services and equipment subject to regular invoices is applicable. However, tax due cannot be less than 3% of the turnover.
A corporate entity registered in Madagascar and having an annual turnover exceeding MGA 200 million is subject to CIT at a rate of 20%.
Revenue sources from the public market must be managed separately from any other revenue and is subject to tax on the public market at a rate of 8%.
The tax payable cannot be less than 5/1,000 of turnover plus a fixed amount of MGA 100,000 for taxable persons carrying on agricultural, artisan, transportation, industrial, hotel, or mining activities. The minimum tax cannot be less than 5/1,000 of turnover plus MGA 320,000 for other activities.
Taxation of non-residents
Only Madagascar-source income is taxable for non-residents.
Revenue of foreign businesses providing services to a Madagascar taxpayer that do not have a permanent establishment (PE) in Madagascar is subject to withholding tax (WHT) at a rate of 10% of any income realised in Madagascar, including dividends. However, financial loan interest is subject to WHT of 20%. See the Withholding taxes section for more information.
Local income taxes
No regional or local income taxes are applicable in Madagascar.