Apart from the Income Tax, the intermittent Income Tax in Madagascar was introduced by the Loi de Finances 2014 followed by the Décision fixant les modalités d’application. The aim of introducing this tax was to broaden the tax base. In Madagascar, the informal sector plays an important role in the economy, and the government is keen to encourage the formalization of these players. Originally called IRI, the 2017 Finance Act replaced it with SIT ( Synthetic Intermittent Tax).
Thus, any unregistered person selling goods and/or services to registered individuals or companies is liable for SIT.
There are 2 main categories of Intermittent Income Tax :
Tax on intermittent income of non-residents :
In the course of your activities, you may be required to carry out transactions with operators who are not resident in Madagascar (consultants, purchase of domain names, etc.). You are then obliged to declare these transactions so that they can be included in your expenses. The applicable rate is 10%.
- Income concerned : services provided on Madagascar’s waters and territories by non-resident individuals, that is those who do not have a registered office or place of business in Madagascar.
- Rate applied: 10%.
Tax on intermittent income of unregistered persons :
Unregistered importers and exporters :
- This tax applies to import and export operations carried out by unregistered persons.
- Rate adopted : 5%.
An exception exists under article 5 of decision no. 4 MFB/SG/DGI of 14/11/2013: the importation of objects and personal effects as part of a final move for any unregistered person is franked at IRI.
Unregistered suppliers :
- The SIT applies to the purchase of services or goods by individuals or legal entities registered with persons who do not have a Tax Identification Number (TIN).
- Rate adopted: 5%.
If you still need clarification for your SIT return, MDG Services is here to advise you. Our team is available to help you prepare and file your tax returns.