Tax laws Madagascar
Madagascar's taxation system encompasses various taxes, including personal income tax, corporate income tax, and other levies, each with specific rates and regulations.
1. Personal Income Tax:
Salary Income Tax (IRSA): Applies to individuals earning income from employment.
Income up to MGA 350,000: Taxed at 0%.
Income from MGA 350,001 to MGA 400,000: Taxed at 5%.
Income from MGA 400,001 to MGA 500,000: Taxed at 10%.
Income from MGA 500,001 to MGA 600,000: Taxed at 15%.
Income above MGA 600,000: Taxed at 20%.
Minimum Tax: Regardless of income, the minimum salary income tax payable is MGA 3,000. citeturn0search0
Individual Business Income Tax (IR): For individuals operating businesses.
Annual Turnover Below MGA 400 Million: Subject to a synthetic tax at a rate of 5% of 70% of turnover, with a minimum tax ranging from MGA 16,000 to MGA 150,000, depending on the activity.
Basic Producers: Farmers, foresters, and intermediaries in the sales chain are subject to the synthetic tax regardless of turnover.
Annual Turnover Above MGA 400 Million: Taxed similarly to corporations, based on profit. citeturn0search0
2. Corporate Income Tax (CIT):
Annual Turnover Below MGA 400 Million: Subject to a synthetic tax of 5% of 70% of turnover, with a minimum tax between MGA 16,000 and MGA 150,000, depending on the sector.
Tax Reduction: A 2% reduction is available for purchases of goods and equipment with proper invoices. However, the tax due cannot be less than 3% of turnover.
Real Tax Regime Minimums:
Agricultural, Artisan, Transportation, Industrial, Hotel, or Mining Activities: Minimum tax is 1% of turnover plus MGA 500,000.
Other Activities: Minimum tax is 1% of turnover plus MGA 1 million.
Retail Fuel Sales: Minimum tax is 1/1,000 of turnover. citeturn0search1
3. Taxes on Non-Residents:
Taxable Income: Non-residents are taxed only on income sourced from Madagascar.
Withholding Tax (WHT):
General Rate: 10% on income realized in Madagascar, including dividends.
Financial Loan Interest: Subject to a WHT of 20%. citeturn0search1
4. Other Taxes and Contributions:
Excise Duties: Levied on certain products like tobacco, alcohol, and specific services, with rates varying between 5% and 325%.
Payroll Tax: Employers contribute up to 13% of eight times the legal minimum salary per employee for social security, plus 5% of the total taxable remuneration for health contributions.
Real Estate Ownership Tax: Imposed annually at rates ranging from 5% to 10% of the property's rental value. citeturn0search4
5. Recent Developments:
In 2019, Madagascar undertook several legislative and administrative measures to enhance tax compliance and revenue collection, including:
Modifying income tax thresholds and exemptions.
Enforcing reporting obligations for transactions.
Implementing digital tools like the "HETRA e-Payment" platform for secure online tax payments. citeturn0search7
Note: Tax laws and regulations are subject to change. For the most current information, it is advisable to consult official Malagasy government sources or seek professional tax advice.
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