Often called the “Las Vegas of Asia", Macau has come to be considered as an offshore tax centre for businessmen and investors thanks to its relaxed corporate and personal tax system. If you are thinking of relocation to Macau for professional or other reasons, read on to learn more about the region’s advantageous taxation structure.
Individual income tax
Citizens and residents of Macau enjoy much lower tax rates than in other economically developed Asian countries. As a foreign resident in Macau, you will not pay tax on your earnings abroad ' you will be taxed only on the income acquired through work for Macanese companies. The first 144,000 MOP is exempt from taxation after which you are subject to a 5% minimum tax rate with the top tier taxed at 12%. Self-employed individuals are also subject to income tax.
For taxation, there is no distinction in Macau between residents and non-residents. All individuals are considered Macau residents if they have been granted a Permanent Residence Permit issued by the Macau Immigration Department or an ID card from the Macau SAR.
If you are working in Macau on a full-time contract, your employer will typically handle all the tax procedures for you: they will calculate and file your taxes, while you will receive a net salary. Alternatively, you will need to handle all tax-related issues by yourself ' make sure to first check whether or not your home country has any tax treaties with Macau before filing a tax return. Another option is to use an umbrella company that will calculate and file taxes on your behalf acting as your employer. You will only need to submit your timesheets to the umbrella company.
Another type of tax you may need to pay in property tax. Property taxes arise from ownership of all kinds of property: residential, commercial, industrial, etc.. The amount of tax is calculated by the assessed value or rental income.
Good to know:
There is no tax in Macau on inheritance, capital gains, or gifts.
Corporate tax in Macau
Business taxes in Macau are significantly lower than in most countries in Europe and the United States, which attracts a lot of businesspeople, investors and start-up creators to the region.
When it comes to corporate taxation, the first 600,000 MOP is exempt from tax. After that, your business will be taxed at the top rate of 12% ' the same principle applies to both citizens and foreign residents of Macau. For taxation purposes, all businesses in Macau are divided into Group A and Group B companies.
Companies belonging to Group A are those able to maintain a level of capital equal to or higher than 1,000,000 MOP. Group A companies are taxed on their certified tax returns presented to the Macau Finance Bureau. Companies belonging to Group B are either first-time filers or those unable to meet the financial requirements of the companies in Group A. These companies are taxed on assessed profits.
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