Madagascar

Inventory valuation

There are no provisions for valuing inventories or determining inventory flows in Madagascar. The tax treatment will follow the accounting treatment.

Capital gains

Capital gains realised from the sale of shares held in a company of which the entire or partial value is derived, either directly or indirectly, from goods located in Madagascar, or from rights thereof, are subject to income tax at a rate of 20%.

Capital gains made by a company on the sale of assets and interests are considered as normal business income that is subject to CIT.

Dividend income

Dividends received by a company are considered as business income subject to CIT.

Certain dividends from a subsidiary may be excluded from CIT (see Dividends exclusion in the Group taxation section).

Stock dividends

Stock dividends are unusual, but they are considered as business income that is subject to CIT.

Interest income

Interest income received by a resident taxpayer from another entity established in Madagascar is subject to WHT at a rate of 20%. Revenue already subject to WHT is no longer taxable to CIT.

Interest on loans granted by members or on loans taken by members to the cooperative society is exempt from WHT.

Interest on shares, as well as distributed income or rebates, paid by cooperative societies to their members is subject to WHT of 10%.

Royalty income

Royalty income received by a resident taxpayer is considered as normal business income subject to CIT.

Foreign income

Foreign income earned by corporate bodies situated in Madagascar is considered as normal business income subject to CIT unless a tax treaty is established and indicates otherwise. There is no provision for tax deferral in Madagascar.