As a special administrative region of China, Macau attracts many businesses with its low tax rates, simple tax system, and free port advantages. The following are the main tax frameworks and relevant regulations for Macau companies:
Main taxes and their rates
● Supplementary income tax (corporate income tax)
Currently Macau implements a territorial tax system, levying tax only on Macao-sourced profits; foreign-sourced income is exempt from tax. The tax rate ranges from 3% to 12% on a progressive basis:
- Taxable profits less than MOP 600,000: Tax-free.
- Taxable profits of MOP 600,000 or more: Taxes are levied on a graduated scale, with a maximum rate of 12%.
● Professional tax (personal income tax)
For employees working in Macau, annual income exceeding MOP 95,000 (approximately 12%) is subject to progressive tax rates ranging from 7% to 12%.
If a company has no local employees, it only needs to file a zero tax return.
All businesses engaged in industrial and commercial activities in Macau are required to register for tax purposes and pay a fixed annual fee (usually MOP300-1,500). However, starting in 2023, most industries will be exempt from business tax, requiring only registration.
1. Regional Cooperation Advantages
Macau and mainland China have signed the Closer Economic Partnership Arrangement (CEPA), allowing goods originating in Macau to enter the mainland with zero tariffs and providing tax credits.
2. Loss Carryback
Group A taxpayers can carry forward annual losses to offset profits up to three years into the future.
3. Offshore Business Exemptions
Offshore companies are exempt from supplementary income tax on income derived outside Macao, and there are no foreign exchange controls.
4. Real Estate Incentives
Companies that own properties for production can apply for property tax exemptions and enjoy depreciation and amortization benefits.
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