Individuals are subject to business income tax, called Impôt sur les Revenus (IR), or to salary income tax, called Impôt sur les Revenus Salariaux et Assimilés (IRSA), depending on the nature of the revenue earned.
For IRSA purposes, an individual resident in Madagascar, either Malagasy or of a foreign nationality, is liable on worldwide income.
For IR purposes, an individual who is not resident in Madagascar is liable only on income from Malagasy sources.
Salary income tax (IRSA)
IRSA scale :
○ Income range up to Ar 350 000 : 0%
○ Income range from Ar 350,001 to Ar 400,000: 5%
○ Income range from Ar 400 001 to Ar 500 000: 10%
○ Income range from Ar 500 001 to Ar 600 000: 15%
○ Income range above Ar 600,000: 20%
In all cases, regardless of the income, the minimum salary income tax payable is 2,000 Ar.
Individual business income tax (IR)
An individual business having an annual turnover of less than MGA 200 million is subject to IR at a rate of 5% (with a possible reduction of 70%) of the annual turnover. However, the minimum tax is MGA 16,000 or MGA 150.000 depending of the activity.
An individual business having an annual turnover exceeding MGA 200 million is taxable in the same manner as a corporation (income tax on the profit). See the Taxes on corporate income section in the Corporate summary for more information.