Taxation in Madagascar: as governed by article IV- 10 of the tax procedure code, every taxpayer in Madagascar must submit a declaration of communication rights before June 30 of each year. Since this is a tax procedure, it applies immediately, regardless of the accounting year.
This obligation applies to all taxpayers whose turnover exceeds 100 million Ariary.
A platform for remote filing of periodic tax returns in Madagascar
The availability of this platform makes it easier for companies to declare their Right of Communication online.
At the launch of the platform, the Direction Générale des Impôts d’Analamanga raised the following key points :
- Separation of tax return entry and payment, i.e. tax return entry and validation are carried out before tax transfer, whereas previously everything was done at the same time;
- Intermittent declarations to be made online for companies managed by the SRE and the DGE, which will put an end to physical declarations ;
- The introduction of an online tax declaration platform that will enable taxpayers to issue a harmonized transfer order, and will no longer oblige them to send proof of payment by e-mail;
- The possibility of rectifying any anomalies in the appendices can be done directly on the site, whereas this was previously reserved for tax authorities.
Teledeclaration of communication rights in Madagascar
You can declare your right to communicate online at https://hetraonline.impots.mg/
9 declaration forms can be downloaded, completed and sent online :
- Fixed asset purchases (AI)
- Appendix of Purchases Not for Resale
- Purchases for Resale appendix
- Schedule of sold services
- Merchandise Sold appendix
- Schedule of Amounts Paid to Third Parties
- Local Products Appendix
- Schedule of Local Products By Product
- Out-of-pocket expenses
To help you submit your returns online, a user manual is available on the tax authorities’ website. Our team offers parallel assistance in preparing and submitting your tax returns at competitive prices. MDG Services can also help you set up a business in Madagascar.
Penalties for correcting a failure to file a right of access request
Section 20.01.56.16 of the Tax Code provides for the following penalties in the event of a failure to file followed by corrective actions:
- at a rate of 0.5 percent, calculated based on the total of the items to be reported as provided for in Article IV-09 of the Code of Tax Procedures, provided that corrections are made within the eight-day period specified in Article IV-10(c) of the Code of Tax Procedures;
- at a rate of 5% if the eight-day period has elapsed—the tax base for which is assessed ex officio in accordance with the provisions of Article V-42 of the Code of Tax Procedures—or if a failure to file is found. The penalty calculated in this manner shall not be less than Ar 1 000 000.
To help you file your tax returns online, a user guide is available on the tax authority’s website. Our team also offers assistance with preparing and filing your tax returns at competitive rates.
You can also get help setting up your business in Madagascar by contacting MDG Services.
Bonus: To minimize costs resulting from failure to file tax returns
Section 20.01.52 of the Tax Code provides for the following penalties in the event of failure to file any required return:
- Ar 200 000 for taxpayers with revenue of Ar 400 000 000 or more
- Ar 100 000 for taxpayers with revenue between Ar 200 000 000 and Ar 400 000 000;
- Ar 50 000 for taxpayers with revenue between Ar 50 000 000 and Ar 200 000 000; persons referred to in Article 01.01.05.I, paragraph 2, of this Code; organizations, foundations, nonprofit associations, and similar entities;
- Ar 20 000 for taxpayers with a turnover of less than Ar 50 000 000.
Failure to file an income tax return results in the suspension of the tax card (CIF), in addition to a fine of 10 000 000 Ar in the event of:
- failure to file any part of the transfer pricing documentation;
- failure to file a declaration, or filing it late, or providing insufficient or inaccurate information regarding beneficial owners;
- failure to maintain a Special Register of Beneficial Owners and the related supporting documents, or failure by legal entities and legal arrangements to update said register of beneficial owners.
It is therefore recommended to ensure that the deadline for filing tax returns is not missed in order to minimize penalties.