Madagascar (MG)
World's fourth-largest island, Madagascar offers extraordinary biodiversity (90% of wildlife found nowhere else), one of the world's lowest costs of living, warm French-speaking culture, and unique opportunities in vanilla, ecotourism, and development sectors.
Tax & Payslip Guide
Understanding your taxes in Madagascar — tax year Calendar year: 1 January to 31 December..
📊 Income Tax Brackets
| Income from | Income to | Rate | Notes |
|---|---|---|---|
| 0 | 4,200,000 | 0% | Tax-free threshold: Ar 0–350,000/month (Ar 0–4,200,000/year). No IRSA deducted. |
| 4,200,001 | 4,800,000 | 5% | Ar 350,001–400,000/month (Ar 4,200,001–4,800,000/year). Low bracket for entry-level formal employment. |
| 4,800,001 | 6,000,000 | 10% | Ar 400,001–500,000/month (Ar 4,800,001–6,000,000/year). |
| 6,000,001 | 7,200,000 | 15% | Ar 500,001–600,000/month (Ar 6,000,001–7,200,000/year). |
| 7,200,001 | 48,000,000 | 20% | Ar 600,001–4,000,000/month (Ar 7,200,001–48,000,000/year). Applies to mid-to-high formal sector earners. IRSA is a withholding tax deducted monthly at source by the employer. |
| 48,000,001 | ∞ | 25% | Above Ar 4,000,000/month (above Ar 48,000,000/year). New top bracket added from 1 January 2026. Applies to senior management and well-compensated expat packages. Verify current thresholds at impots.mg as they are subject to annual revision. |
🏛️ Social Contributions
Madagascar social security fund. Covers old-age pension (retraite), work-related accident insurance (AT/MP), and family allowances (prestations familiales). The employer bears the majority of the contribution. Employee contribution is capped at the maximum contribution base set by CNAPS annually.
Occupational health and workplace medicine insurance. Provides access to OSTIE médecins and annual workplace health checks. Covers work-related health monitoring. Most large Tana employers are registered.
🛒 VAT Rates
TVA (Taxe sur la Valeur Ajoutée). 20% is one of the higher VAT rates in sub-Saharan Africa. Many basic necessities are zero-rated or exempt. Tourism services are subject to 20% TVA. Businesses with annual turnover above Ar 200,000,000 are required to register for TVA.
🧾 Sample Payslip Decoder
🌍 Special Expat Tax Rules
No specific expat tax ruling equivalent to the Dutch 30% ruling. All employees are subject to standard IRSA (Impôt sur les Revenus Salariaux et Assimilés) withholding tax. However, many international organisations (UN agencies, NGOs, diplomatic missions) operate tax-exempt status under bilateral agreements or international conventions — employees of these organisations may be exempt from IRSA. Housing allowances and certain benefits-in-kind provided by employers are partially exempt from IRSA up to specific ceilings. Consult a DGI-registered tax adviser for optimisation.
📋 Double Tax Treaties
Madagascar has a limited network of double taxation treaties (DTT). Confirmed treaties: France (the most important — covers dividends, interest, royalties, and employment income), Mauritius, and a few other countries. No DTT with the US, UK, Germany, Australia, or Canada. Without a treaty, income taxed in Madagascar cannot be credited against home-country tax under a formal treaty — seek specialist advice. OECD BEPS framework: Madagascar has committed to basic transparency measures but enforcement is limited.
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