Madagascar Investment Income Guide 2026

Overview — Investment Income Taxation

Madagascar taxes investment income through withholding taxes at source for most passive income streams. The withholding tax is generally a final tax for resident individuals, meaning no further tax reporting is required. For companies, withheld tax is creditable against corporate tax. For non-residents, withholding tax rates may be reduced under applicable double tax treaties. The Direction Générale des Impôts administers all withholding tax under the General Tax Code. The investment landscape in Madagascar includes Treasury bills, bank deposits, listed shares, and mutual funds.

Dividends — WHT

Dividends paid by Malagasy-resident companies are subject to withholding tax. The standard rate is 20% for resident shareholders. For non-residents, the rate is generally 25% (reduced under applicable DTTs, e.g., 10% under the France-Madagascar treaty). The withholding tax is a final tax for resident individuals, meaning the dividend income is not included in the individual's progressive IRPP assessment. For corporate shareholders, the WHT is a creditable advance payment against their IBS liability. Qualifying dividends from listed companies may benefit from reduced rates under certain conditions.

Interest Income — Bank Deposits & Treasury Bills

Interest income is subject to withholding tax at source:

• Bank deposit interest — 20% WHT (non-final, must be included in annual tax return)
• Treasury bills (Bons du Trésor) — 20% WHT deducted at source
• Government bonds (Obligations du Trésor) — 20% WHT on interest payments
• Corporate bonds — 20% WHT on interest

The 20% rate applies to all interest income for residents. For non-residents, the rate is generally 25% (reduced under DTTs). Treasury bills are available in 13-week, 26-week, and 52-week tenors and are issued by the Central Bank of Madagascar (Banque Centrale de Madagascar) on behalf of the government.

Capital Gains on Securities

Capital gains from the disposal of shares and securities are treated as income from movable property. For individuals, these gains are subject to a flat-rate withholding tax rather than progressive IRPP rates. Listed shares traded on the Madagascar Stock Exchange (MSE) may benefit from reduced rates or exemptions to encourage capital market investment. The standard rate on unlisted share gains is 20%. Government securities are exempt from capital gains tax.

Mutual Funds & Collective Investment Schemes

Distributions from mutual funds (Organismes de Placement Collectif en Valeurs Mobilières, OPCVM) are generally subject to withholding tax at 20% for resident individuals. The fund itself is taxed at a reduced rate on its investment income. This favourable treatment encourages retail participation in collective investment schemes. For corporate investors, distributions may be subject to standard IBS rates. The Financial Markets Commission (Commission des Marchés Financiers, CMF) regulates all collective investment schemes in Madagascar.

FAQs

Do I need to report dividend income on my tax return?

If you are a resident individual, the 20% WHT on dividends is final, so no further reporting is needed. Non-residents and corporate shareholders should report and claim treaty relief where applicable.

Are foreign investment income and capital gains taxable in Madagascar?

Yes, tax residents are taxed on worldwide investment income. Foreign dividends, interest, and capital gains should be declared in the annual tax return. Foreign tax credits may be available under DTTs.

Can I claim a refund if WHT exceeds my tax liability?

Yes, where the WHT deducted exceeds the final tax liability, you can claim a refund from DGI by filing an annual return and supporting documentation.

Disclaimer

This guide provides general information about Malagasy investment income taxation 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.