Prepare Madagascar 2026 ordinary IRCM capital-income withholding workpapers for dividends, taxable interest, financial placements, board remuneration and qualifying cooperative distributions. Classify resident and nonresident natural or legal recipients, apply the dividend base allowance and statutory rounding, distinguish annual cooperative returns from ordinary interest, and assemble the payer declaration and payment evidence. Read the LFI baseline together with the July amending law before using a rule. Securities-disposal scope is explained, but gain measurement and disposal collection mechanics remain held. Treaties, special-sector regimes, foreign-payer collection, actual publication activation dates and live form fields remain outside this partial source draft.
Madagascar · tax year 2026 · changed 3 Nov 2026
Built from the law · every figure links to the official source · sources read 1 Nov 2026 for tax year 2026
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| Ordinary IRCM rule and necessary conditions | 2026 amount or treatment | Primary law and official URL |
|---|---|---|
| Income within 01.04.02–03, after an applicable exemption/special rule and subject to an operative double-tax treaty | 20% of taxable income rounded down to whole MGA 1,000 | CDI 01.04.04; LFI replacement 01.04.04, p.42 |
| Dividends received by resident/nonresident associates | 50% allowance on the dividend base, then statutory rounding and ordinary IRCM rate; this is not a separate reduced rate | same |
| Interest on cooperative shares and rebates distributed annually to cooperative members by general-meeting decision | 10% on rounded taxable income; not every cooperative payment and not its own business profit | same |
| Cooperative dissolution surplus | Taxable under 01.04.03(3); no automatic annual-interest/rebate reduced-rate treatment | CDI 01.04.03–04 |
General reference only. This Guide is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for any specific person's facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in Madagascar.
Use for an ordinary Malagasy paying body's capital-income workpaper after establishing the recipient, exact income category and legal version. IRCM covers legal persons, partnerships, participation companies and natural persons (CDI 01.04.01). Dividend scope expressly includes resident/nonresident natural and legal recipients. Do not treat this as a complete rule for all worldwide investment receipts or assume a foreign payer has an identified Malagasy withholding route. CDI 01.04.01–03.
Select the legal text before computing. The LFI baseline adds dividends and securities-disposal gains by individuals under 01.04.02(6). The July LFR replaces that limb with dividends and securities-disposal gains of resident/nonresident natural and legal persons. It also repeals the separate nonresident-dividend IR provision at 01.01.14 II-B. The historical interaction before repeal is unresolved here: do not automatically add the old separate IR charge to IRCM or infer that the new wording operated throughout the year. Both LFI article 24 and LFR article 22 require radio or posted publication for activation; the actual dates have not been established. The dated signatures alone do not settle a transaction's operative period. The computations below assume the client has established application of the stated post-LFR ordinary rules; they do not prove publication. LFI, printed p.42 and art.24; LFR, amendments to 01.01.14 II-B and 01.04.02(6), art.22.
Salary belongs to IRSA; ordinary business profit belongs to business IR. The separate post-LFR IR treatment of lending interest received by nonresident banks/credit establishments belongs to cross-border, not to a second copy of its rate here. Establish sector approvals first: this Guide does not compute a mining, free-zone or other preferential regime.
| Ordinary IRCM rule and necessary conditions | 2026 amount or treatment | Primary law and official URL |
|---|---|---|
| Income within 01.04.02–03, after an applicable exemption/special rule and subject to an operative double-tax treaty | 20% of taxable income rounded down to whole MGA 1,000 | CDI 01.04.04; LFI replacement 01.04.04, p.42 |
| Dividends received by resident/nonresident associates | 50% allowance on the dividend base, then statutory rounding and ordinary IRCM rate; this is not a separate reduced rate | same |
| Interest on cooperative shares and rebates distributed annually to cooperative members by general-meeting decision | 10% on rounded taxable income; not every cooperative payment and not its own business profit | same |
| Cooperative dissolution surplus | Taxable under 01.04.03(3); no automatic annual-interest/rebate reduced-rate treatment | CDI 01.04.03–04 |
Do not give the dividend allowance to interest, board fees or a securities gain. Preserve evidence of IRCM actually paid: article 01.04.04 makes payment, on justification, representative and discharging for the income tax on the income that gave rise to that IRCM payment. That does not discharge unrelated earnings or prove foreign-tax-credit entitlement. CDI 01.04.04.
Classify the receipt. CDI 01.04.02 includes: (1) interest and other products of company/enterprise bonds and loans, whether or not the issuer has its seat in Madagascar; (2) interest on credit-establishment bons de caisse whose beneficiaries are not disclosed to the administration; (3) tantièmes, attendance fees, flat expense reimbursements and other remuneration of the sole administrator, board members or persons performing administrator functions regardless of title; (4) redemption prizes/premiums paid to creditors and bondholders; (5) receivable, deposit and security-deposit income; and (6) dividends and the version-dependent securities-disposal scope above. This enumeration is not an exemption from separate territorial, sector or collection checks. CDI 01.04.02; LFR 01.04.02(6).
Article 01.04.03 additionally names financial-institution placements including bank/insurance placements and BTA/BTF treasury securities; credit shareholder/associate current accounts and intragroup treasury advances; cooperative share interest and member rebates; and surplus on dissolution of a cooperative, union, federation or confederation. A product name alone does not settle an exemption. CDI 01.04.03.
Measure supported receipts. Under 01.04.05, a bond/loan uses the interest or distributed income; a prize uses the prize itself; a redemption premium uses the difference between the reimbursed sum and issue amount; board remuneration uses general-meeting/board resolutions, minutes or equivalent documents; and 01.04.03 income uses the general directors'/managing directors' declaration. Keep those documents and reconcile gross income, allowance if applicable, rounded base, tax withheld and net paid. Article 01.04.06 has special issue-amount rules for redemption premiums, including differing issue amounts. This draft does not execute those variable-issue or deemed-issue computations. CDI 01.04.05–06.
Securities disposals remain a measured gap. The post-LFR charging limb expressly covers natural/legal, resident/nonresident disposers. It does not itself establish in the portions read the complete acquisition-cost basis, deductible disposal charges, lot selection, losses, noncash valuation, intermediary/payer identity or actual disposal return route. Do not replace a gain with gross sale proceeds, import the real-property-gain basis or apply the dividend allowance. Obtain the missing rules before calculating a disposal liability. CDI 01.04.02–06; LFR 01.04.02(6).
Exemptions require the exact category and legal version. Read the following against CDI 01.04.10–14 and the Finance Law amendments:
| Category | Statutory boundary and source |
|---|---|
| Bank/financial-establishment lending interest; sight-deposit interest | Article 01.04.10 excludes these from 01.04.02–03. Do not extend sight deposits to all term deposits, or treat the IRCM exclusion as no separate IR for a nonresident lender; see the cross-border Guide. CDI 01.04.10 |
| External financing for investment | The CDI compilation still prints an exemption for investment loans from external financing bodies. The actual LFI deletes the second bullet of 01.04.10. Apply the deletion when the LFI governs; do not grant the stale printed exemption. Boundary-date transactions require publication evidence. LFI 01.04.10, p.42; CDI 01.04.10 |
| Actual direction functions | The named chairman, the administrator described as « l’administrateur adjoint au président à titre de directeur général », and the administrator temporarily delegated to perform the chairman's functions are excluded for income corresponding to those direction functions. Baseline 01.04.10 limits this to amounts deductible from legal-person taxable profits; July LFR deletes that last paragraph. Preserve the function test and distinguish board fees; do not retain the deleted cap in a proven post-LFR case. CDI 01.04.10; LFR 01.04.10, p.22 |
| Cooperative loans | Article 01.04.11 excludes interest on loans granted by members or on borrowings contracted by members with the cooperative. Do not merge this loan category with annual cooperative share interest/rebates. CDI 01.04.11 |
| Agricultural/mutual credit | Article 01.04.12 names interest shares of cooperatives/unions, local agricultural-credit funds and agricultural associations; central mutual-credit fund borrowing interest; and interest/arrears/products of accounts in credit establishments in agricultural mutual-credit funds' names. Verify the actual named entity/product rather than claiming a general financial-sector exemption. CDI 01.04.12 |
| Exclusive effective material/mutual-aid associations; warrant advances | Article 01.04.13 excludes genuine qualifying mutual-aid associations except their borrowings. Article 01.04.14 excludes advances to companies by endorsement of warrants. Retain those factual limits. CDI 01.04.13–14 |
The paying body calculates, withholds, declares and remits under CDI 01.04.08. CPF I-26 identifies the territorially competent tax office for companies/enterprises. CPF I-27(A) requires a declaration to the operational unit managing the taxpayer's dossier by the 15th of the month following payment. Under I-27(B), tax is due and exigible on making taxable sums available or crediting any account, whatever payment mode. Do not defer tax solely because cash was not withdrawn. CDI 01.04.07–09; CPF I-26–27.
Public offering of French/foreign securities also has the formalities referenced in CPF I-28; those implementing formalities are not supplied by this tax computation. CPF I-28.
Identify the actual nonfiling, late-payment, understatement or other breach before a sanction calculation. CDI 20.01.51–54 contain separate triggers and turnover/income bands; business IR penalties owns the pack's ordinary business-band figures. Do not copy salary-omission or nonresident-service-specific sanctions into IRCM. A final IRCM penalty calculation, classification outside that business band and procedural relief remain held here. CDI 20.01.51–54.1.
The ordinary rate is expressly subject to double-tax treaties; this Guide does not establish a treaty rate, beneficial-ownership test or relief form. Dividend scope includes resident and nonresident associates for the allowance. A legal person's foreign incorporation alone does not settle tax residence; use the residence/PE screening in cross-border. Keep that Guide's separate post-LFR nonresident-bank lending-interest IR rule distinct from an IRCM exemption. Foreign-payer collection, foreign tax credits and historical II-B/IRCM interaction before the July repeal remain unresolved. CDI 01.04.01–04,10; LFR 01.01.14 II-B/D and 01.04.02(6).
Both hypothetical cases assume an ordinary Malagasy payer, supported classification, an established post-LFR legal version, no applicable treaty reduction and no special-sector exemption. They compute IRCM only, without a separate historical II-B charge. Hypothetical amounts are client inputs, not statutory thresholds.
Case 1: dividend allowance before rounding. A resident associate's gross dividend is MGA 10,005,999. Apply the dividend allowance to obtain MGA 5,002,999.50, round taxable income down to MGA 5,002,000, then compute MGA 1,000,400 IRCM. Withholding gives net cash MGA 9,005,599. Do not round the dividend before applying the allowance. CDI 01.04.04.
name: Dividend allowance then taxable-income rounding
inputs:
gross_dividend: 10005999
steps:
- after_allowance: gross_dividend * (1 - 0.50)
- rounded_base: floor(after_allowance / 1000) * 1000
- ircm: rounded_base * 0.20
- net_dividend: gross_dividend - ircm
expected:
after_allowance: 5002999.50
rounded_base: 5002000
ircm: 1000400
net_dividend: 9005599
Case 2: classify annual cooperative return versus ordinary placement interest. In alternative documented categories, MGA 1,234,567 is either annual cooperative share interest distributed to a member by general-meeting decision, or taxable ordinary term-placement interest with no exemption. Rounded income is MGA 1,234,000 in each. Only the first meets the reduced-rate condition: IRCM MGA 123,400 versus MGA 246,800. The MGA 123,400 difference follows the facts, not a taxpayer election. A cooperative dissolution surplus or member loan is a different classification and cannot be placed into this annual-share-interest case automatically. CDI 01.04.03–04,10–11.
name: Cooperative annual distribution versus taxable term placement
inputs:
supported_income: 1234567
steps:
- rounded_base: floor(supported_income / 1000) * 1000
- qualifying_cooperative_ircm: rounded_base * 0.10
- ordinary_placement_ircm: rounded_base * 0.20
- category_difference: ordinary_placement_ircm - qualifying_cooperative_ircm
expected:
rounded_base: 1234000
qualifying_cooperative_ircm: 123400
ordinary_placement_ircm: 246800
category_difference: 123400
| Primary source and portions actually read from cached official PDFs | Read on |
|---|---|
| DGI CDI-LFI 2026, printed pp.43–45: full 01.04.01–15 with neighbours; pp.12–13: residence/IR exclusion context; pp.22–23: old 01.01.14 II; pp.172–174: complete 20.01.51–54.1 sanctions context. Capital page43 visually checked | 2026-11-01 |
| DGI CPF-LFI 2026, printed pp.16–17: full I-26–28 and adjacent payroll/property headings to distinguish filing jobs | 2026-11-01 |
| Loi 2025-021, LFI 2026, printed p.42: complete IRCM amendments to 01.04.02,04,10, visually checked; printed p.129: article24 activation text and signature | 2026-11-01 |
| Signed Loi 2026-004, LFR 2026, printed p.20: II-B repeal and II-D insertion; p.22: full 01.04.02(6) replacement and 01.04.10 paragraph deletion, visually checked; p.48: article22 activation text and signature | 2026-11-01 |
Not yet confirmed: Actual LFI article24/LFR article22 radio/posted-publication activation dates and boundary-period transactions; historical nonresident-dividend II-B/IRCM interaction; complete securities-disposal cost basis, expenses, losses, lot/valuation and payer/intermediary collection rules; variable/deemed issue-amount redemption-premium computations; actual treaty entitlement/rates/forms; foreign-payer collection and foreign tax credits; special-sector eligibility and IRCM regimes; full current filing form/identifier/boxes, electronic validation/payment reference and receipt workflow; complete IRCM sanctions/procedural relief. All seven ordinary pack domains remain partial. Independent AI source review accepted the stated partial scope on 1 November 2026; see the closure review. No accountant attestation.
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