Below is a precise, source-checked overview of the Madagascar–France and Madagascar–Mauritius tax treaty landscape, plus the key regimes, rates, and investor-friendly incentives that matter if you plan to live, invest, or structure assets in Nosy Be / Madagascar (with cross-island links to Mauritius).
1) Double Taxation Treaties (DTTs) that matter
Madagascar ↔ France
- A comprehensive Convention to avoid double taxation between Madagascar and France has been in force since 1984. It allocates taxing rights, prevents the same income being taxed twice, and provides mechanisms to eliminate double taxation at residence.
Madagascar ↔ Mauritius
- Madagascar and Mauritius signed their DTT on 30 September 1994 (brought into force in December 1995). Mauritius implemented it domestically via the Double Taxation Agreement (Republic of Madagascar) Regulations 1994. The treaty covers income taxes and includes relief mechanisms, non-discrimination and information exchange.
Quick view of treaty impact on cross-border payments (Madagascar source)
- Withholding tax (WHT) maximums under Madagascar’s treaties currently include:
- Mauritius: Dividends up to 10%, Interest 10%, Royalties/fees up to 5%.
- France: Dividends 15–25%, Interest 15%, Royalties/fees 10–15%.
(Compare to non-treaty rates: Dividends 10%, Interest 20%, Royalties 10%.)
Investor benefit: Properly invoking a DTT can reduce leakage on cross-border cash flows (dividends/interest/royalties), eliminate double taxation at residence, and add legal certainty to multi-island or France-linked holding/operating structures.
2) Madagascar’s investment & tax environment
The Economic Development Board of Madagascar (EDBM) is the official one-stop shop for investors. Its guides summarize the legal/tax framework, including VAT rules, wage taxes, and sectoral incentives (e.g., export-oriented regimes).
What you should know:
- Stable, codified regimes: Madagascar’s General Tax Code and investment laws set out the ordinary corporate tax system plus incentive regimes (notably for export-oriented activities), which may include customs and tax exemptions or holidays where eligibility criteria are met.
- Operational taxes you will encounter:
- VAT framework and credits/refunds (per EDBM investor guides).
- Wage taxes/withholding obligations for employers.
Investor benefit: EDBM-framed regimes allow predictable set-up, potential tax and customs relief where conditions apply, and access to a single window for permits and registrations—helpful for hospitality, residential, and tourism developments in Nosy Be.
3) Using the treaties in practice (France / Mauritius ↔ Madagascar)
A) Residence & relief method
- Under the France–Madagascar DTT, France and Madagascar allocate taxing rights and provide relief in the state of residence to avoid double taxation of income sourced in the other state (exemption or credit mechanisms set by the treaty and domestic law).
B) Cross-island flows with Mauritius
- The Madagascar–Mauritius DTT can lower WHTs on dividends, interest, royalties/technical fees, provided beneficial ownership and treaty-eligibility documentation (e.g., residence certificate) are in order. Mauritius’ own legal instrument recognizes the agreement since 1994.
C) Structuring takeaways for Nosy Be projects
- Equity returns: Plan dividend routes through a treaty-resident entity to capture reduced WHT.
- Debt funding: Treaty-capped interest WHT (10%) can make shareholder loans or bank debt more predictable.
- IP/management services: Treaty-capped royalties/fees help when importing brand/management expertise from treaty partners.
4) Madagascar vs. Mauritius: complementarity for “dual-island” strategies
- Mauritius maintains a large treaty and IPPA network and is frequently used as a regional holding/finance platform for Africa-Indian Ocean strategies (official overview via EDB Mauritius). Pairing a Mauritius holding or services hub with on-the-ground operations in Nosy Be under the MG–MU DTT is a common, defensible approach when aligned with substance and business purpose.
Investor benefit: A dual-island structure can blend operational advantages of Nosy Be (land, talent, tourism growth) with Mauritius’ treaty network and financial infrastructure, while the Madagascar–Mauritius DTT manages friction on cross-border payments.
5) Compliance checklist (practical & bank/notary-friendly)
- Determine tax residence of each entity/person (France, MG, MU). Align management & control with residence claims.
- Collect treaty documents (residence certificates, beneficial ownership statements). Apply treaty WHT rates at source.
- Register properly with EDBM and authorities (tax ID, employer registration, social charges) and follow VAT/WHT filing calendars.
- Substance & transfer pricing: Maintain genuine activity, governance, and arm’s-length pricing—especially for Mauritius–Madagascar service or IP arrangements. (General policy guidance reflected across official investor materials.)
- Bank/notary readiness: Keep treaty citations (articles, rates), cash-flow maps, and board approvals/agreementson file. It accelerates payments and notarized closings.
6) Frequently asked investor questions
Is there really a DTT with France and with Mauritius?
- Yes. France (1984) and Mauritius (signed 1994; in force 1995). These are recognized in official instruments and reputable databases.
Which rates should I expect on outbound payments from Madagascar?
Under current summaries: Dividends up to 10–25%, Interest 10–15%, Royalties/fees 5–15%, depending on the partner and treaty article; non-treaty baselines are higher (e.g., 20% on interest). Always confirm the exact article and any protocol changes before distribution. PwC
Where do I start?
- Use EDBM (edbm.mg) as your first stop for registrations and official guides; then align banking, notarial steps, and treaty documentation with your tax counsel.
7) Executive summary (advantages & benefits)
- Legal certainty: Two cornerstone treaties (FR–MG, MU–MG) prevent double taxation and provide predictable rates for cross-border income.
- Cash-flow efficiency: Reduced WHT caps on dividends/interest/royalties can materially improve project IRRwhen correctly applied.
- Set-up made easier: EDBM’s one-stop framework and investor guides offer clear steps for company creation, tax IDs, VAT, and access to customs/tax incentives where conditions are met.
- Strategic pairing with Mauritius: Leveraging Mauritius’ treaty/IPPAs ecosystem next to operations in Nosy Be provides structural flexibility with an official legal foundation (MG–MU DTT).
Sources (official & authoritative)
- EDBM Madagascar (official): investor portals & guides (tax/VAT/incentives, one-stop services).
- France–Madagascar DTT (1984): treaty text/official listings.
- Mauritius–Madagascar DTT (1994/1995): Mauritius legal instrument & treaty databases.
- Current WHT/treaty matrix (Madagascar): PwC Tax Summaries (2025).
