1 Taxes on income
The Professional Tax is levied on income from employment with progressive rates varying between 7% to 12% charged on the individual annual income of the contributor (salaried and white collar employees, as well as self-employed professionals) in excess of MOP144,000 (USD18,461.53).
In the case of self-employed professionals, tax is based on the net profits of the previous year, providing appropriate accounting records are kept.
Complementary (Profits) Tax
It is levied on net profit derived from any commercial or industrial business. Sliding-scale tax, averaging 12% for income over MOP600,000.00 and exempt for income below this level.
Property tax is levied on revenues derived from urban buildings located in Macau SAR and is due from the owner of the right to the income. The income derived from property when leased is the amount of the rent, and when not leased, it is the valuation of the property as if it was rented.
Property tax is applied on an annual basis of 10% of the actual rental income or 6% on the official ratable value if not rented out. A 10% deduction on the income or rental value is allowed for repair and maintenance expenses if properly supported by the landlord or owner.
There are several exemptions3 to the property tax, namely:
1. Total exemption for real estate purchased exclusively for industrial purposes;
2. Partial exemption: during a period of five years in Macau and ten years on the islands for new real estate rented for industrial purposes.
2. Taxes levied on goods or services
Consumption tax is charged on fuel and lubricants, tobacco and alcohol. The tax on some alcoholic drinks is levied ad valorem according to the CIF/Macau value on the remainder. It should be noted that fuel supplied to industrial units is free from tax.
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% respectively).
Vehicles intended for use in Macau's Public Services, tourism sector and public transport, cargo, are all exempt from Motor Vehicle tax.
There are many situations and acts possible of being taxed under Macau stamp duty regulations.
In Macau, Stamp duty is no longer levied on petitions or other documents addressed to the Public Administration.
The stamp duty will apply on: 1) Acts and Documents; 2) Advertisements and Other Forms of Publicity; 3) Insurance Contracts; 4) Lease Contracts; 5) Contributions and Taxes; 6) Shows; 7) the Conduct of Certain Defined Activities (Administrative Licenses); 8) Banking Operations; 9) Transport; 10) Games and Lotteries; 11) the Incorporation and Amendment of Companies.
The onerous transfer of property (real estate) is subject to 1% stamp duty when the transaction price is and below MOP$2,000,000.00, 2% when the transaction price is within MOP2,000,000.00 to MOP$4,000,000.00, and 3% when the transaction price is above MOP$4,000,000.00.
For free transfer of property (real estate) or free transfer of assets over MOP$50,000.00 is subject to 5% stamp duty.
If it is companies or non-resident who obtain property (real estate) and assets, either by onerous or free transfer, an exact 10% of stamp duty will be charged.
The stamp duty on certain acts and situations can be exempted or partially reduced.
Social Security Contributions The monthly contribution made by the employer is MOP30.00 per resident employee and MOP45.00 per non-resident employee.
3. Industrial Tax
Charged on all individuals and companies engaged in any commercial or industrial business.Fixed annual fee varies according to the nature of the business. The usual value is MOP300.00. This tax is applied to each activity the company conducts. Therefore, the total yearly tax is a cumulative of the tax for the various activities. There is a 50% reduction for businesses located in the islands (except for offshore banking operations).
4. Tax treaties
Macau has signed Conventions for the avoidance of double taxation with PRC and Portugal, being both of them already implemented. Besides these, other conventions were signed with Belgium and Mozambique, yet waiting for the completion of internal jurisdiction procedures for implementation. All Conventions are based largely on the OECD and UN models for double taxation treaties.
5. Tax incentives
Industrial Tax - For newly established entities, there is a waiver of business registration tax.
For previously approved cases, a total exemption is possible.
Land Rental – Exemption of land rental, which is under MOP100.00.
Property Tax -There is a standard deduction of MOP$3,500.00 on property tax. If the tax subject is of two or more individuals, its property tax can be similarly deducted the aforementioned amount if and only if one of them is permanent resident of Macao SAR. If the tax subject is companies, individual commercial entrepreneur or non-resident of Macao SAR, it is not eligible for such deduction. A total exemption is granted on profits made from new real estate purchased exclusively for industrial purposes up to five years in Macau, while 10 years for those situated on islands.
Complementary (profits) Tax - There is always a possible 50% reduction. In 2013, the exemption allowance is MOP600,000.00.
Salaries Tax - There is a 30% waiver and the exemption allowance for its assessment in 2016 is MOP$144,000.00. It is noted that employer should withhold tax from causal worker whose daily salary is over MOP$640.00 or employee whose monthly salary is over MOP$16,000.00.
Stamp Duty – In 2014, there is exemption on insurance contracts, banking service charges, admissions of performance, exhibition or any kind of entertainment, as well as putting up or placement of advertisements, signboards and publicity materials.
Stamp Duty (Conveyance of Property) – There is a waiver of stamp duty for Macao permanent residents on the first MOP$3,000,000.00 of the fixed asset value. However, this is not applicable to residents who have enjoyed such an exemption in previous years.
Tourism Tax - Exemption of tourism tax on the services provided by luxury, class 1 and class 2 restaurants in group one classification indicated in article 6, and also on proprietary business activities provided by similar business in group one classification of group 1, 2 and 3 hotels indicated in article 5 of the Decree-Law no. 16/96/M.
Motor Vehicles Tax - Vehicles intended for use in Macau's Public Services, tourism sector, public transport, and cargo are exempted from MVT.