Madagascar Capital Gains Tax Guide 2026

Overview — CGT in Madagascar

Capital gains tax in Madagascar is governed by the General Tax Code (Code Général des Impôts). A chargeable gain arises when a person disposes of an asset for consideration exceeding the allowable cost. Disposal includes sale, exchange, gift, transfer, or deemed disposal. The tax applies to both individuals and companies. Resident individuals and companies are taxed on worldwide chargeable gains; non-residents are taxed only on gains from Malagasy assets. For individuals, capital gains on property are subject to a specific withholding tax regime. For companies, gains are included in ordinary income and taxed at the applicable IBS rate.

Property Capital Gains — Withholding Tax

Gains from the disposal of real property (land and buildings) are subject to a capital gains withholding tax. The purchaser must withhold a percentage of the sale price and remit it to DGI. The standard withholding rate is 5% of the gross sale price for residents and 10% for non-residents. This withholding tax may be a final tax or an advance payment depending on the taxpayer's circumstances. The chargeable gain is calculated as: Sale price minus (Acquisition cost + Incidental costs + Improvement expenditure). Allowable costs include the original purchase price, legal fees, registration duties, and capital improvements.

Principal Residence Exemption

Gain from the disposal of an individual's principal private residence is exempt from CGT, provided the property has been occupied as the main residence at the time of sale. The exemption covers the building and its usual plot of land. Additional residences (second homes, investment properties) are fully chargeable. To claim the exemption, the taxpayer must have occupied the property for at least 2 years before the sale and provide evidence of residency.

Shares & Securities — Movable Property

Gains from the disposal of shares and securities are treated as income from movable property (revenus des capitaux mobiliers). For individuals, these gains are generally subject to a flat-rate withholding tax rather than the progressive IRPP rates. The rate depends on the type of security and the holding period. Gains from listed shares may benefit from reduced rates or exemptions under certain conditions. For corporate shareholders, gains are included in ordinary taxable income and taxed at the IBS rate.

FAQs

How do I calculate my chargeable gain on property?

The chargeable gain is the difference between the sale proceeds (net of selling costs) and the acquisition cost (plus enhancement expenditure and buying costs). A standard deduction of 10% of the acquisition cost for holding costs may apply for properties held over 5 years.

Can I offset capital losses against capital gains?

Yes, capital losses in a tax year may be offset against capital gains in the same year. Unrelieved losses may be carried forward for up to 5 years but cannot be offset against other income.

What assets are exempt from CGT?

Principal residence, personal effects, motor vehicles (personal use), assets held for less than 2 years (trading assets taxed as income instead), and assets transferred on death.

Disclaimer

This guide provides general information about Malagasy capital gains tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Malagasy tax advisor or the Direction Générale des Impôts for advice specific to your situation. InvestmentKit does not provide tax advice.