Madagascar
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Digital VAT
About
Goods
About
Goods
About
Digital VAT
About
Digital VAT
Goods
Digital VAT
Goods
Digital VAT
In Madagascar, the Value Added Tax (VAT), locally known as Taxe sur la Valeur Ajoutée (TVA).
VAT standard rate
The standard VAT rate for goods and services in Madagascar is 20%. This rate applies to most transactions involving goods, unless specific exemptions apply, such as for basic food items or educational materials.VAT reduced rate
- 5% for locally produced pasta products, local imports/sales of butane gas and their containers.
- 10% for imports and sales of butane gas.
VAT standard rate
The standard VAT rate for digital services in Madagascar is 20%.Exemptions and Zero Rate
Certain goods and services are exempt, effectively taxed at 0%, including education, financial transactions, health services, basic food, and seeds. Additionally, exports of goods and services are zero-rated at 0%.Threshold
- Businesses with an annual turnover equal to or exceeding MGA 200 million are required to register for VAT. From MGA 100 million since 2018.
- Businesses below this threshold may opt for voluntary registration.
- For non-resident businesses there is no threshold, meaning registration is required from the first sale of goods.
Deductible VAT
You can deduct VAT on the following transactions:- Local purchases of goods and services: VAT on goods and services acquired within Madagascar for business purposes is deductible.
- Imports of goods: VAT paid on imported goods intended for taxable business activities can be deducted.
- Equivalent transactions: Certain transactions treated as taxable supplies, such as specific self-supplies or transfers, may also qualify for VAT deduction.
Registration procedure
For registration, it is required to fill a registration form, attach a copy of the company statute, proof of identity, certificate of residence, Trade register extract, Power of attorney and Declaration of all corporate officers (managers and co-managers) and Proof of appointment of the local representative (for company based outside of Madagascar). All documents should be in French, Madagascar's official language.Tax representative
Taxpayers whose headquarters are located outside the Madagascar must appoint a local tax representative who has a local bank account.VAT returns filing and VAT payment date
Persons subject to VAT must file returns on a monthly basis. Returns and VAT payments are generally due by the 15th of the following month. Returns must be submitted along with VAT payments in local currency (MGA – Malagasy Ariary).Penalty
Failure to register, file VAT returns, or pay VAT on time may result in penalties, interest charges, and in some cases, suspension of import/export privileges.Threshold
There is no VAT registration threshold for non-resident digital service providers. VAT applies from the first sale to consumers in Madagascar. Determining the Place of Supply
A digital service is considered supplied in Madagascar if it is consumed or utilized within the country. Indicators include the customer's billing address, IP address, or SIM card country code associated with Madagascar. List of E-Services Subject to VAT
Digital services liable for VAT in Madagascar encompass:- Online advertising services
- Software licenses, including SaaS and cloud-based services
- Data storage and processing services
- Platform operator commissions
- Telecommunications services, such as text messaging
- Broadcasting and streaming services
- Hosting services
- Online gaming
- Automated distance learning programs
Registration Procedure
Non-resident digital service providers are not required to register directly for VAT in Madagascar. Instead, they must appoint a local fiscal representative responsible for VAT registration, collection, and remittance. If a fiscal representative is not appointed, the responsibility to account for VAT falls on the recipient of the services in Madagascar. Tax Representative
Appointing a local fiscal representative is mandatory for non-resident providers. This representative handles all VAT-related obligations on behalf of the foreign entity. In the absence of such a representative, the local recipient becomes liable for VAT under the reverse charge mechanism. VAT Returns Filing and Payment Date
The appointed fiscal representative must file monthly VAT returns. These returns are due by the 15th day of the month following the tax period. Payments should be made from a bank account in Madagascar.
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