Madagascar

Reform of the General Tax Code introduced in the 2023 Financial Law

The reform consists of the extraction of procedural tax provisions from the General Tax Code. From January 2023, the General Tax Code is split into:

• Tax Code (Code Des Impôts): This code will include the rules of tax assessment and liquidation as well as tax conventions and the special tax regime for free zones and enterprises.
• Tax Procedures Code (Code des Procédures Fiscales): This code will contain the tax provisions relating mainly to actions carried out between the tax administration and taxpayers, such as registration, declaration and payment of tax, collection, tax audit, tax litigation, or any other procedures governed by the Tax Law.

Change in turnover threshold for synthetic tax regime

From 2024, any corporate entity having turnover less than 400 million (previously 200 million) Malagasy ariary (MGA) is subject to corporate income tax (CIT) under the synthetic tax regime.

Keep accounting in official languages only under the real tax regime

From 2024, under the real tax regime there is an obligation to keep regular accounts only in Malagasy or in French, whether the accounting is manual or computerised. 

Increase of the minimum CIT under the real tax regime

From 2024, under the real tax regime, CIT cannot be less than the minimum set below:

• MGA 500,000, increased by 1% of the annual turnover, excluding tax of the exercise, for taxable persons carrying out agricultural, artisanal, industrial, mining, hotel, and tourist activities.
• MGA 1 million, increased by 1% of the annual turnover, excluding tax for the financial year, for other companies. However, the minimum is 1/1,000 of annual turnover for taxpayers selling fuels at retail. For land, river, and maritime transporters of people and goods, the minimum collection is set by regulatory text provided for by the third paragraph of article 01.02.05 of the Code.

Reduction of the period of presence in Madagascar for determining permanent establishment (PE) status  

The period of presence in Madagascar for the status of a PE is reduced from 180 days to 120 days for a construction site, an assembly or installation project, or supervision activities linked to this project, and to 90 days for the provision of services.