Madagascar taxes residents on worldwide income and non-residents on Madagascar-source income only. Madagascar operates a self-assessment system for corporate tax, with the domestic tax authority conducting post-filing review.
Madagascar's tax year is the calendar year.
Madagascar's headline corporate income tax (CIT) rate is 20%.
The headline personal income tax (PIT) rate is 20%.
The standard VAT/GST (or equivalent consumption tax) rate is 20%.
An individual is resident if they have their home or dwelling in Madagascar. A company is resident if incorporated or principally managed in Madagascar (a place-of-management test in addition to incorporation). Resident individuals and companies are taxed on worldwide income; non-residents are taxed only on Madagascar-source income.
A non-Madagascar-resident entity has a Madagascar permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Madagascar on the entity's behalf, following the OECD Model Treaty definition as applied under Madagascar's domestic law and any applicable tax treaty.
No CFC-style attribution provision exists in Madagascar's General Tax Code. Madagascar instead operates a genuinely modern, OECD-aligned transfer pricing regime requiring related-party cross-border transactions to be priced at arm's length, with a specific "privileged tax regime" test (a foreign counterparty is treated as being in a privileged regime if its local tax burden is at most half of what Madagascar's ordinary rate would produce on the same income) and defined dependency-link criteria (majority capital ownership or common third-party control). This is a transfer-pricing framework, not a CFC regime attributing a foreign subsidiary's own undistributed profits to a Madagascar parent.
Per Madagascar's Code General des Impots, inter-company loans between companies within the same group are subject to thin capitalization rules; for companies approved under Madagascar's Industry Development Law specifically, deductible interest is capped at a 3:1 total-debt-to-equity ratio. PwC's Madagascar corporate tax summary confirms the general inter-company thin cap restriction but does not itemize a universal ratio applicable outside that approved-industry regime.
Madagascar does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics under the French-derived legal tradition shared across the region. Madagascar does not have a comprehensive ATAD2-style anti-hybrid regime.
No foreign bank account or foreign financial asset reporting regime exists requiring residents to separately disclose foreign accounts; foreign income is reported through the standard annual tax return.
Madagascar does not provide a broad participation exemption for foreign dividends in the European sense, consistent with the transfer-pricing-focused (rather than exemption-focused) anti-avoidance framework already confirmed elsewhere on this page; relief from double taxation is available primarily through Madagascar's foreign tax credit system where one exists.
Madagascar has a foreign tax credit mechanism for foreign tax paid on foreign-source income also taxed domestically, capped at the domestic tax otherwise due on that income; specific provisions are not extensively documented in public sources for Madagascar and should be confirmed directly with the Direction Generale des Impots before relying on them.
Madagascar has signed four tax treaties.