The income tax treaty between Madagascar and Morocco entered into force on 14 November 2022. The treaty, signed 18 November 2016, is the first of its kind between the two countries.
The treaty covers Malagasy tax on income, synthetic tax, direct tax on hydrocarbons, tax on salaries and assimilated income, tax on income from movable assets, and tax on gains from immovable property. It covers Moroccan income tax and corporation tax.
The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise furnishes services through employees or other engaged personnel if the activities continue for the same or connected project within a Contracting State for a period or periods aggregating more than 183 days within any 12-month period.
The following capital gains derived by a resident of one Contracting State may be taxed by the other State:
Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.
Both countries apply the credit method for the elimination of double taxation. A provision is also included for a tax sparing credit for tax that has been waived or reduced in a Contracting State in accordance with the laws of that State relating to fiscal incentives.
The treaty applies from 1 January 2023.