Madagascar Corporate Tax Guide 2026

Overview — Corporate Tax in Madagascar

Corporate tax in Madagascar is governed by the General Tax Code (Code Général des Impôts) and administered by the Direction Générale des Impôts (DGI). A company is tax resident if it is incorporated under Malagasy law or if its place of effective management is in Madagascar. Resident companies are taxed on worldwide income; non-resident companies with a permanent establishment are taxed on Madagascar-source income only. Companies must register for tax with DGI and obtain a Tax Identification Number (NIF). The tax year aligns with the calendar year, though companies may apply for a different accounting period with DGI approval. Annual returns are due within 4 months after the end of the accounting period but no later than 30 June.

Standard Corporate Tax Rate — 20%

The standard IBS rate for resident companies in Madagascar is 20% of chargeable profits. Non-resident companies with a permanent establishment in Madagascar are also taxed at 20% on Madagascar-source income. Taxable profit is computed as gross revenue less allowable deductions including operating expenses, depreciation, interest costs (subject to thin capitalisation rules — maximum debt-to-equity ratio of 3:1), and losses carried forward. Losses may be carried forward for up to 5 years. Capital gains are included in ordinary income and taxed at the standard corporate rate.

Reduced Rate — Agriculture & Export — 15%

Companies engaged in agriculture (crops, livestock, forestry, fishing) and export activities benefit from a reduced IBS rate of 15%. This incentive is designed to promote primary production and export diversification. To qualify, the company must derive at least 60% of its gross income from qualifying agricultural or export activities. Agricultural companies may also benefit from additional depreciation incentives and tax holidays for specific crops such as vanilla, cocoa, and coffee under the investment code.

New Companies — 10% (First 2 Years)

Newly incorporated companies benefit from a reduced IBS rate of 10% during their first 2 years of operation. This incentive is available to all sectors and is designed to encourage business creation and formalisation. The reduced rate applies from the first accounting period after incorporation. After the 2-year period, the company moves to the standard 20% rate (or the applicable reduced rate for qualifying sectors). To claim this incentive, the company must be in good standing with DGI and file all required returns on time.

Branches of Foreign Companies

Foreign companies operating through a branch in Madagascar are taxed at 20% on Madagascar-source profits, the same rate as resident companies. Branch profits remitted to the head office attract a branch profit remittance tax (repatriation tax) of 10%. This effectively brings the combined rate to 28% for repatriated profits. Foreign companies may prefer to incorporate a Malagasy subsidiary to avoid the remittance tax and access the standard dividend withholding tax regime.

Depreciation Rules

Madagascar uses a depreciation system for tax purposes rather than capital allowances. Rates vary by asset category:

• Buildings — 5% per annum (straight-line)
• Plant & machinery — 10–20% per annum (straight-line or declining balance)
• Motor vehicles — 20% per annum (declining balance)
• Computers & office equipment — 33.33% per annum (straight-line)
• Furniture & fittings — 10% per annum (straight-line)

Companies investing in qualifying assets under the investment code may benefit from accelerated depreciation or additional first-year allowances.

FAQs

What is the penalty for late filing of corporate tax returns?

Late filing attracts a penalty of 10% of the tax due plus 1.5% interest per month on the unpaid amount. Additional penalties may apply for failure to maintain proper records or for tax evasion.

Can foreign companies claim treaty relief?

Yes, Madagascar has double tax treaties with France, Mauritius, and several other countries. Treaty relief may reduce withholding tax rates on dividends, interest, and royalties paid to non-residents.

Is there a minimum tax for loss-making companies?

Yes, Madagascar imposes a minimum lump-sum tax (Impôt Minimum Forfaitaire, IMF) on companies that report losses or low profits. The IMF is based on turnover and ranges from 0.2% to 0.5% of gross revenue, depending on the sector.

Disclaimer

This guide provides general information about Malagasy corporate 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.