INCOME TAX IN MADAGASCAR (IR)

Posted on 13/05/25 by new_mdg in category Taxation
Income-tax-in-Madagascar

Income tax and related taxes in Madagascar are direct taxes on income and gains earned by individuals, businesses, or similar entities.

Categories of Income Tax and Related Taxes

There are five (5) categories of income tax and related taxes in Madagascar:

What is Income Tax in Madagascar?

Here are the key points to know about this tax in Madagascar.

It is a tax on income earned in Madagascar or Malagasy-sourced income, payable annually by taxpayers with an annual turnover excluding VAT of ≥ MGA 400,000,000, according to the 2024 Finance Law. Previously, the threshold was MGA 200,000,000.

Taxable income under IR includes:

  • Income of any kind
  • Income not explicitly exempted by the General Tax Code provisions
  • Income earned in Madagascar by individuals or entities not subject to IRSA

Additionally, IR is calculated as follows:

IR = Fiscal result during a fiscal year × rate
The applicable rate is 20%.

Fiscal result = Accounting result – Tax deductions + Reintegrations of non-deductible charges Accounting result (net profit) = total income – total expenses

Entities Subject to IR

All individuals or entities engaged in commercial, industrial, artisanal, or non-commercial professions in Madagascar with an annual turnover of at least MGA 400,000,000 are subject to IR, as mentioned earlier.

In addition to companies, certain individuals are subject to IR:

  • Majority shareholder-managers of LLCs (SARL), i.e., those holding or controlling the majority of shares, including shares held by direct ascendants, descendants, or spouses.
  • Majority shareholder-managers of LLCs without remuneration: taxable under IR and required to pay the minimum tax.
  • Single-member LLC (SARLU) managers.
  • Co-managers who are also majority shareholders.
  • Independent consultants who are residents and operate individually, if their worldwide income exceeds MGA 400,000,000 excluding VAT.

Income Tax Declaration

The income tax declaration, one of the primary tax filings in Madagascar, must be submitted along with the annual financial statements at the end of the fiscal year.

A fiscal year spans 12 months and can align with the calendar year (01/01/N to 31/12/N) or follow a split fiscal year (01/07/N to 30/06/N+1).

The declaration must be filed no later than the 15th day of the fifth month following the end of the fiscal year:

  • May 15 of year N+1 for fiscal years ending on December 31 of year N.
  • November 15 of year N+1 for split fiscal years.

Whether you are a business or an individual, benefit from tax assistance in Madagascar by contacting MDG Services.