Macau Tax & Business Guide - Deloitte

Basic facts
Population 488,144 Inflation 4.4% (2005)*
Main languages Cantonese, Hokkien GDP per head US$24,274
Currency Pataca (MOP) GDP growth 6.7% (2005)*
Economic communities WTO
GDP sources 0.1% agriculture, 7.2% industry, 92.7% services
*Economist Intelligence Unit.
Political environment

A Portuguese territory for 442 years, Macau was handed back to China on December 20th 1999.

Macau is a Special Administrative Region (SAR) of the PeopleÌs Republic of China. The first chief executive of the Macau SAR is Edmund Ho Hau Wah, who was chosen in May 1999 by a Chinese-appointed selection committee. Mr Ho began a new five-year term in December 2004.
Foreign trade and investment
Exports US$2.5bn (2005)* Imports US$3.9bn (2005)*
*Economist Intelligence Unit.

Main export markets: The US, China and the EU.

Major exports: Textiles, garments and toys.

The abolition of global textile export quotas in 2005 caused a shift in MacauÌs trade pattern. Textile exports to the EU have declined, allowing mainland China to overtake the EU as MacauÌs second-largest export market in 2005. However, since restrictions were placed on ChinaÌs textile exports to the US and EU in mid-2005, textile exports have experienced strong growth.

Macau depends heavily on the gaming sector and tourism industries.
Business and financing
Business forms Unlimited liability company, limited liability company by quotas

The limited liability company by quotas is the most common form of business organisation. Another type of limited liability company by quotas is availableÛthe limited liability company by a sole owner.

Macau has a stable financial system, with no exchange-control regulations. Funds can move freely into and out of Macau. The Bank of China and Banco Nacional Ultramarino are the official appointed agents of the Treasury of Macau SAR.
Labour environment
Unemployment rate 4.1% (2005)* Minimum wage None
*Economist Intelligence Unit.

MacauÌs unemployment rate is decreasing. The rise in the number of gaming facilities and hotels is affecting employment and a shortage of skilled workers is likely.

Labour-importation schemes are in place for unskilled and skilled workers who cannot be recruited locally. The government is considering additional measures.
Taxation
Corporate tax
Main rate Complementary tax 3Ò12%

Complementary tax is imposed on all income derived by an entity from Macau. The rates of complementary tax range from 3% to 12%, depending on the amount of income.
Individual tax
Main rate Professional tax rates up to 12%

Resident and non-resident individuals are taxed only on Macau-source income. An individual is considered resident if that person holds an identity card or permanent residence permit issued in Macau. Employees and professional practitioners are subject to professional tax at progressive rates up to 12%.
Capital gains

There is no separate capital gains tax in Macau. Capital gains derived from the disposal of business assets are subject to complementary tax in the same way as ordinary income.
Indirect tax
Standard rate N/A

Macau does not levy a value-added tax (VAT), goods and services tax (GST) or sales tax.
Tax administration and compliance
Tax year Calendar year

The tax year is the calendar year. Taxpayers in Macau are classified as Group A and Group B taxpayers. To qualify as a Group A taxpayer, companies must apply to be so classified or meet the minimum requirements either in terms of share capital or annual taxable income generated over the past three years. Public companies, companies with capital exceeding MOP1m or with an average annual profit exceeding MOP500,000 for the last three years qualify to file under Group A.

Group A taxpayers must submit their annual complementary tax returns in respect of the preceding year between April and June. Tax returns should be certified by registered accountants or auditors in Macau. Group B taxpayers must file their returns before the end of March and certification is not compulsory.

Provisional payment of complementary tax is due in one or two instalments in September or November of the following tax year, based on taxable income declared in the tax return. Final tax liability is due upon final assessment.
Additional tax information
Tax treaties Macao has signed double tax treaties with Portugal and Belgium and it has concluded an agreement with China that the two governments will not impose tax simultaneously on the same income or property of their residents.
Dividends Subject to complementary tax.
Revenue protection Macau does not have any anti-avoidance rules.
Groups There are no provisions for group taxation.