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VAT compliance

The VAT legislation does not make provision for when services are regarded as being exported. The fact that the recipient is established abroad does not necessarily result in zero- rating of the service.

Currently, the Tax Administration accepts that exported services include those services eligible under free zone company regime, which are mainly quality control, data processing, call centre and cinematographic services. All other services performed by local suppliers are subject to VAT.

Refunds to foreigners

Accounting basis and tax periods

VAT returns and VAT payments related to operations performed during a month must be filed and made no later than 15 days after the following month. Periodical VAT filing is compulsory even if no VAT is payable.

VAT payable is the difference between VAT output and VAT input recorded during a period (monthly).

Only VAT input on an invoice showing the VAT collected by the supplier and the Tax Identification Number of the supplier can be credited against VAT output.

There is no mechanism to allow foreigners who are not tax registered in Madagascar to obtain a refund of VAT paid.

Place, time and value of supply

If VAT output is not sufficient in order to offset VAT input, then the difference constitutes a VAT credit. A VAT credit can be carried forward for an undetermined period.

Place of supply

Returns and payment of VAT

VAT is applicable to all goods delivered in Madagascar, or all services performed in Madagascar. Services are considered to be performed in Madagascar when they are executed in Madagascar or invoiced to a recipient established in Madagascar.

Returns and payments of VAT must be filed at the territorially competent tax office, no later than the 15th day of the following month.

VAT must be paid by bank transfer.

Interest and penalties

The penalty ranges depend on the nature of the default:

40% of the tax due for no submission of a VAT return, and under-declarations of VAT;

150% of the tax due for sale without regular invoice;

150% of the amount of the invoice in the case of fictitious invoice;

80% to 150% in the case of opposition to a tax verification; or

1% per month of the tax payable for late payment of VAT due.

Time of supply

VAT is payable at the time of clearing in the case of importation, or at the time of delivery of goods for local purchase, or at the time of payment for services.

Value of supply

VAT is payable on the CIF value of imported goods, or on the cost or price of a transaction for services and local transactions in respect of goods.

Criminal penalties may also be imposed. Penalties can be mitigated in certain circumstances.


Free zone enterprises and qualified exporters may obtain a VAT refund of a VAT credit which is directly attributable to their export activities. Normal companies having a VAT credit of more than 20 million Ariary due to important investments are also entitled to claim a VAT refund.

Application for a refund must be submitted at the same time as the periodical VAT return is filed.

Objections and appeals

A tax inspector has three years from the date of filing in order to challenge, by way of notice, a VAT declaration submitted by the taxpayer. The taxpayer has 15 days from such notice to provide further explanation or information.

In the case of a dispute, the taxpayer can appeal to the Director of Tax and the Minister of Finances. If the dispute cannot be settled at this stage, the final recourse is the administrative court.

Time limits

The prescription period for output tax and claims by the Tax Administration is three years. The maximum period for the claiming of input tax is six months. An invoice can only be cancelled within six months from the date of issue.

VAT records

Tax invoices

A proper tax invoice must be prepared in duplicate and include the following information:

  • date of issue;

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