Tax Types
Direct Taxes
The direct taxes in the Territory include Industrial Tax, Complementary Tax, Professional Tax and Property Tax. The revenue from franchises granted is also considered to be a kind of direct tax revenue.
 
Indirect Taxes
Indirect taxes in the Territory include Stamp Duties, Tourism Tax, Consumption Tax, Land Rent and Motor-Vehicle Tax. Of all, the consumption tax revenue comprises the largest portion of the indirect tax revenue.
Direct Taxes Indirect Taxes
Industrial Tax
Complementary Tax
Professional Tax
Urban Property Tax
The revenue from franchises granted
Stamp Duties
Tourism Tax
Consumption Tax
Land Rent
Motor-Vehicle Tax
Industrial Tax

Industrial tax is levied on companies or individuals engaged in any commercial or industrial business irrespective of where their residence or headquarters are situated. All entities, which derive income from the territory of the Macao is subject to industrial tax.

 

Any person intending to operate any business or industrial activity in Macao should first proceed to register his activity as an “industry”. The registered activities will then be subject to industrial tax. Therefore, the industrial tax is, in fact, a kind of business registration charge, charging different amounts on different types of businesses or industries. But it should be noted that the payment of industrial tax itself is not the granting of a license for activating an individual or a collective body’s industry. The taxpayer, after paying the industrial tax respective to his industry, should then proceed to petition for the appropriate administrative or industrial license.

 

Registration of the activities shall be made with the Finance Department 30 days before the commencement of business.

Tax is payable before the commencement of business and thereafter.

Other than banking and insurance business the annual tax payable ranges from MOP 500 to MOP 1,500 depending on the nature of the business.

Complementary Tax
Total Income
Profit tax is imposed on the total income earned in Macao by individuals or corporations irrespective of where their residence or headquarters are situated, excluding rental income from buildings situated in Macao.

The total income of an individual is the total of his business profits and income from work.

The total income of a corporation is its profits derived from commercial and industrial activities.

 

Taxpayers

Under the Complementary Tax Regulation, taxpayers are classified in one of the two groups as follows:
 
Group A taxpayers
These refer to the following business enterprises:
  1. All companies (SAR);
  2. All forms of business entities having a capital of not less than MOP 1,000,000 or whose average taxable profit in the last three consecutive years is higher than MOP 500,000; and
  3. Those who elect to be a Group A taxpayer.
Group A taxpayers shall be taxed on the basis of profits computed under duly organized accounting records and shall submit tax returns certified by registered accountants or auditors.
 
Group B taxpayers
These refer to business enterprises, which do not fall into Group A.
Group B taxpayers shall be taxed on the basis of presumed profits determined by the Finance Department.
 

Filing and Payment

Filing

Annual tax returns must be filed with the Finance Department by the following dates:

    Group A taxpayers – 1 April to 30 June
    Group B taxpayers – 1 February to 31 March

Payment of tax

Payment of tax shall be made by two equal installments normally in September and November. However, if the amount is not greater than MOP 3,000, payment shall be made by one installment, normally in September.

Tax rates

With effect from 2014,the complementary tax rates are as follows:

Annual taxable income(MOP)
rate(%)
Up to 600,000
no
Over 600,000
12
 
 
Professional Tax

Professional tax is levied on all personal income arising in or derived from Macao, including salaries, wages, bonuses, fees, commissions, leave pay, value of free accommodation and other prerequisites.

 

Taxpayers

Taxpayers are divided in two groups: employees (those employed to render services to third parties in return for compensation on daily or monthly basis) and professional practitioners (those who are self-employed and render professional services).

In the case of employees, professional tax is deductible at source and the tax deducted by the employer must be paid to the tax department on a quarterly basis within the prescribed period.

For professional practitioners, the tax is based on the net profit of the previous year.

Prepared in accordance with appropriate accounting, and approved in accordance with existing legal provisions in the Financial Bureau registered accountant or auditor’s signature and verification.

Agreed losses for taxation purposes may be carried forward and deducted from assessable profits in the following three years.

 

Tax rates

The professional tax rates are progressive up to a maximum rate of 12%. No any surtax.

The professional tax is calculated on the assessable income after 25% deduction.The rates are as follows are applicable:

Annual taxable income (MOP)
Tax rate (%)
Up to144,000
Nil
Amount exceed 144,000
 
Next 20,000
7
Next 20,001 to 40,000
8
Next 40,001 to 80,000
9
Next 80,001 to 160,000
10
Next 160,001 to 280,000
11
Over 280,000
12
 

Starting from 2013,a 30% reduction in professional tax amount has been granted.It subjects to the annual tax incentive announced by the Government.

 

Filing and Payment

Employers are required to provide a copy of relevant identified document and file Form M2 with the Finance Department within 15 days after commencement of employment. Employers are required to file any changes with the personal details of employees with the Finance Department within 15 days the changes become effective.

Employers are required to deduct professional taxes from their employees’ salary incomes on a “pay-as-you-earn” basis, and remit these deductions to the tax authorities on a quarterly or monthly basis. Non-residents are required to pay tax on a monthly basis.

Professional practitioners who work together with not less than four other professional practitioners or have an average turnover over the last three years of more than MOP1million are obliged to submit annually, before 15 April, Professional Tax returns in respect of the preceding year. The tax returns should be certified by accountants or auditors who are registered with the Macao Registered Auditors and Accountants Committee.

Other professional practitioners are obliged to submit annually, between January and February, professional tax returns in respect of the preceding year. Certification of the tax returns by registered accountants or auditors is not required in these cases.

 

Non-Residents

Professional tax is payable by all non-resident specialists, technicians and professionals working in Macao. The amount payable is the same as Macao residents, with a minimum of 5% even if the respective remuneration does not exceed the exempt amount. The tax deducted by the employer must be paid to the finance department on a monthly basis within the prescribed period.

Property Tax

The property tax is charged on the revenue derived from all urban houses in Macao, no matter they are being leased or for self-use. For leased houses, their revenues are referred to their amounts of rent use. For non-leased houses, their revenues are referred to the economic benefits that the users of the houses can obtain from them. A fixed tax rated of 16% is applied to the revenues of all urban houses. Tax is charged at 10% on the official ratable value if not rented out.

A deduction of up to 10% of the rental income shall be allowed upon request made to the Finance Department to cover the cost of repairs and maintenance incurred by the taxpayer.

Property tax shall be payable by one installment during the months of June, July and August.

Exemptions from property tax include the following situations:

1. The owners use buildings for industrial purposes.
2. New residential or commercial buildings or buildings which have undergone improvements or extensions with investment in excess of 50% of the value of the property are exempted for a period of four years in Macao City or six years in the Islands.
3. New industrial buildings are exempt for a period of five years in Macao City or ten years in the Islands.
4. Buildings being occupied by non-profit making schools approved charitable organizations and religious bodies.
Stamp Duty

Stamp duty is levied on a variety of documents and transactions executed in Macao.

There is new change in property transfer tax. The tax on fixed property transfer will be 1% for first MOP2,000,000, 2% for the next MOP2,000,000 and 3% for the excess amount, while free transfer of property (real estate) or free transfer of assets over MOP50,000 is subject to 5%. Additionally, stamp duty of 0.5% is levied on the intermediate transfer of real estate.

Transfer of shares of a Macao incorporated commercial or industrial company is subject to 1% stamp duty on the nominal value of shares.

If the transfer of the shares results in a shareholder holding 80% or more than 80% of the total shareholding of the company, such shareholder shall be subject to 3% stamp duty on the assessable value of the fixed assets of the associated company in proportion to the shareholding % of such shareholder. Couple would be consider as one shareholder.

 

The tax rates on the value of certain important documents or transactions are as follows:

 
1. Registered capital
Up to MOP 1 million  
0.4%
Next MOP 4 million 0.3%
Next MOP 5 million 0.2%
Thereafter 0.1%
2. Public deeds or contracts
Sale of fixed assets up to MOP 2 million 1.0%
Sale of fixed assets MOP 2 million to MOP 4 million 2.0%
Sale of fixed assets up to MOP 4 million 3.0%
Free transfer of assets over MOP 50,000 5.0%
Transfer of shares 1.0-3.0%
Supply of goods 0.2-0.5%
3. Insurance premium plus surcharges 2.0-5.0%
4. Interest and commission received by banks 1.0%
Consumer Tax

Charged on fuel and lubricants, tobacco, alcohol. The tax on some alcoholic drinks is levied at valorem according to the CIF/Macao value; on the remainder it is specific.

Tourism Tax

Tourism tax is imposed at the rate of 5% on the bill of the services rendered in Macao by establishments such as hotels, guesthouses, restaurants, dancing halls, nightclubs, massage and sauna parlours. 

Motor Vehicle Tax

This tax is levied on the actual sale price of new vehicles covering automobiles, motorcycles and scooters and on imported vehicles for the private use of the importer or marketing agents, varying between 30% and 55% (motorcycles and scooters, 10% and 30%).

Land Rent

Ownership of land situated in Macao is not subject to any tax. However, if the land is leased from the Macao Government it will be subject to an annual land rent. The amount of the land rent payable depends on the location and characteristics of the land.