Are you wondering what Madagascar’s 2026 Finance Act means for your business? What impact will these new tax provisions have? Find out about the main changes and how they will affect the taxes and regulations applicable to businesses and individuals in Madagascar.
Here is a summary of the major changes that will take place in 2026 compared to the provisions of the 2025 Supplementary Budget Act.
Income tax (IR) and advance payments
IR taxation regimes by option
The tax provision on the option to be taxed under income tax without being subject to VAT has been reinstated after being repealed. This option requires the financial statements to be certified by certified public accountants.
Taxpayers earning between Ar 200 million and Ar 400 million who wish to opt for the actual income regime (income tax) must submit a request to the department responsible for managing their tax files. The change in tax regime takes effect from the fiscal year following notification of the decision to accept (Art. 01.01.02 and Art. 01.01.13).
For majority managing partners of limited liability companies subject to income tax, the detailed definition of majority status (shares held by families and de facto managers) to emphasize that the status of majority managing partner is only recognized for a natural person acting in their own name, and explicitly excludes permanent representatives of an associated legal entity, even if the latter holds the majority of shares (Art. 01.01.05 a).
With regard to the IR advance payment, the period of application for companies operating in import-export has been extended from 7 years to 10 years from the start of their financial years (Art. 01.01.15).
Taxation of dividends paid to individuals
The income tax exemption on dividends received by resident and non-resident individuals will take effect from the 2026 financial year. Before applying the 20% rate to dividends received, a 50% allowance must be applied (Art. 01.04.04).
Deductibility of expenses
Expenses that are not subject to disclosure requirements are not tax deductible when calculating income tax.
Similarly, contributions paid to the FMFP are not deductible if the employee receiving the training does not have an employment contract with the contributing company (Art. 01.01.10b).
Synthetic tax (IS)
Any purchases made from unregistered suppliers are no longer tax deductible, nor is the related ISI, as the article on the 2% tax reduction on corresponding purchases has been repealed (Art. 20.01.54.1-a).
Tax on salary income and similar income (IRSA)
A marginal rate of 25% is applied to income brackets starting at Ar 4,000,000.
Employees with gross salaries of Ar 4,000,000 or more will therefore pay more IRSA. See salary calculation method.
Tax on income from movable capital (IRCM)
Taxation on dividends received by resident or non-resident individuals or legal entities will apply from the 2026 financial year (Art. 01.04.02 and Art. 01.04.04).
As a corollary to this provision, the 10% tax on dividends received by non-residents is abolished (Article 01.01.03.- 13° of the Tax Code relating to the 2025 Finance Act).
Changes to tax procedures
IS advance payment due date :
The deadline for payment of corporate income tax installments has been changed as follows: no later than March 31 instead of March 15 for the first installment and no later than June 30 for the second installment (Article I-17).
Payment of registration fees :
All tax payments must be made through the Hetraphone platform.
Clarification on certain points :
deadline for filing tax returns on intermittent income earned by non-residents (IRI-NR) is the 15th day of the month following the month in which the service provider was paid (art 01.01.14 II);
Determining the amount of penalties that make tax offenses significant, including setting a minimum fine of AR 100,000 and specifying the VAT penalty of up to 150% for any false or fictitious invoices.
Reporting and payment obligations that must be fulfilled by the due date, including VAT-reportable turnover.
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