Corporate - Significant developments

Last reviewed - 08 July 2021

2017 financial year is still opened to tax audit

The 2017 financial year remains non-prescribed in 2021, by way of derogation from the three-year tax statute of limitations.

Tax card

Obligation to ask for a tax card for each place of business or establishment in addition to each category of activity.

Change of conditions to have a regular invoice

Information about the address of the supplier and the total amount in words on the invoices are included as conditions for which an invoice is considered regular.

Formalisation of electronic correspondence with the tax authorities

Notifications and all correspondences by electronic way from the tax authorities are from now permitted.

Automatic taxation

There is the possibility of automatic taxation to taxpayers subject to tax audit in case of opposition to the implementation of the audit or when access to documents or documents are obstructed.

There is immediate application of automatic taxation in the event of failure to file a declaration by the due date, after a reminder by the department managing the taxpayer's file.

Tax on procurement contracts (TMP)

TMP is extended to any use of public funds, and public contracts awarded in application of financing agreements or international treaties instead of only public contracts assimilated previously.

First-level sub-contractors become subject to the TMP as follows:

  • If the sub-contractor is resident, the TMP is withheld by the contract holder and remitted to the tax office in charge of the sub-contractor's file, no later than the 15th of the month following the withholding.
  • If the sub-contractor is non-resident, the sub-contractor must appoint an accredited representative who will be in charge of collecting and paying the TMP to the tax authorities.

Other taxes (financial act 2021)

Value-added tax (VAT)

VAT exemption for operations on certain products:

  • Sale of maize (local sale) and flour (locally manufactured).
  • Sale of edible oil manufactured by local industries.
  • Import and sale of wheat, iodine, and fluorine.
  • Import and sale of medical materials, equipment, and consumables.

VAT rate of 5% for locally produced butane gas and pasta products, instead of 20%.

Deductibility of VAT on purchases of petroleum products for duly authorised hotels and restaurants using generators when their establishment is situated in a locality with no current power.

Registration fees

Application of registration fees of 40,000 Malagasy ariary (MGA) per donor in case of inter vivos donations in direct descending line.

Communication right

Extension of the application of the obligation of communication right to any company subject to VAT, regardless of the amount of its turnover.

Transactions involving the purchase of products or goods for resale and the acquisition of fixed assets must henceforth be declared under the communication right.

Products or services in respect of medical expenses no longer have to be declared under the communication right.