Are you wondering what tax declarations are mandatory in Madagascar? Did you know that failing to file these declarations could lead to heavy penalties? To ensure your business complies with regulations, it’s essential to have a clear understanding of tax declarations in Madagascar. Here’s a complete guide to help you navigate the main tax obligations and deadlines for businesses.
Understanding the Tax Regimes in Madagascar
Depending on your turnover, your business is subject to a specific tax regime.
- Real Regime: This applies to companies with an annual turnover of 400 million Ariary or more.
- Synthetic Tax Regime (IS): For businesses with a turnover below 400 million Ariary, this simplified regime applies.
Each regime comes with its own set of obligations. Be sure to identify the one that fits your business to avoid any risk of financial penalties.
The Main Taxes for Businesses in Madagascar
Businesses in Madagascar are required to pay several types of taxes depending on their activity. Here are the main ones:
- Synthetic Tax (IS): This annual tax applies to businesses generating less than 400 million Ariary in turnover. The rate is set at 5% of turnover, with a minimum payment ranging between 16,000 and 150,000 Ariary depending on your activity.
- Corporate Income Tax (IR): This tax targets companies that generate profits. It is subject to a rate of 20%, with a minimum payment based on your activity:
- 100,000 Ariary + 5‰ of turnover: For agricultural, artisanal, mining, industrial, or tourism activities.
- 1,000,000 Ariary + 5‰ of turnover: For other commercial activities.
- 1‰ of pre-tax turnover: For fuel retailers.
- Value-Added Tax (VAT): VAT is set at 20% on sales made. Businesses with a turnover under 400 million Ariary can opt for optional VAT registration.
- Income Tax on Salaries and Similar (IRSA): This tax applies to salaries and benefits in kind (vehicles, rent, domestic staff). The applicable rate is 20%. Minority managing partners are also subject to this tax.
- Tax on Income from Movable Capital (IRCM): This tax applies to income generated from financial investments such as current accounts with a credit balance or treasury bills. The rate is 20%.
For businesses involved in international transactions or controlled by foreign entities, transfer pricing documentation is mandatory when filing corporate income tax (IR).
Tax Deadlines to Respect
In Madagascar, the main tax declarations must be submitted within the deadlines set by the law. These deadlines vary depending on the specific tax. For example:
- IR and IS must be declared and paid annually.
- VAT and IRSA are usually declared on a monthly or quarterly basis, depending on your tax regime.
Additionally, some businesses may need to submit interim declarations, such as the Interim Income Tax (IRI) and Interim VAT (TVAI).
Why Seek Professional Help for Tax Compliance?
Tax obligations in Madagascar can be complex. To ensure you meet deadlines and avoid penalties, it’s wise to consult with experts. They can assist with the preparation and submission of your declarations to tax authorities. You can also opt for e-filing through the official website www.impots.mg.
Stay compliant while benefiting from up-to-date tax monitoring to anticipate any legislative changes.