Macau Personal Income Tax

Individuals are subject to tax on income arising in or derived from Macau. Macau observes a territorial basis of taxa­tion. Consequently, the concept of tax residency has no signifi­cance in determining tax liability, except in limited circumstances.

Income subject to tax. Professional tax is imposed on employ­ment and self-employment income arising in Macau. Comple­mentary tax is imposed on business income arising in Macau.

Employment income. Income from employment is subject to pro­fessional tax. For purposes of the tax, taxpayers are divided into employees and professional practitioners (see Self-employment and business income).

In general, all income from employment, including benefits in kind and directors’ fees, is subject to professional tax.

Self-employment and business income. Professional practitioners are subject to tax on self-employment income. Sole proprietors are subject to tax on business income.

Rental income. Property tax is levied annually on the owners of real property in Macau. Actual rental income derived from real property is taxed at a rate of 10%. For property that is not rented, the tax is levied at a rate of 6% on the deemed rental value of the property as assessed by the Macau Finance Department. A de­duction, by application for rental property, of up to 10% of the rent or rental value of the property is allowed for repairs, mainte­nance and other expenses.

For 2016, a property tax deduction of up to MOP3,500 is granted for each property unit.

The following buildings are exempt from property tax:

  • Industrial buildings occupied for industrial purposes by the owners
  • New residential or commercial buildings during the first six years after construction for buildings located on Coloane and Taipa islands, and during the first four years after construction for buildings located in other parts of Macau
  • New industrial buildings during the first 10 years after con­struction for buildings located on Coloane and Taipa islands, and during the first 5 years after construction for buildings located in other parts of Macau
  • Buildings occupied by nonprofit educational and charitable organizations

Exempt income. Employers’ contributions to medical and related schemes and to approved pension schemes are not included in taxable income.

Taxation of employer-provided stock options and share awards. Stock options granted by employers with respect to employees’ services in Macau are subject to professional tax. The stock options gains are subject to tax in Macau in the year in which the individual exercises the option. The taxable stock option amount is calculated as follows:

Taxable stock option income = (market value on
exercise date – option price) x number of shares exercised

Share awards granted by employers with respect to employees’ services in Macau are subject to professional tax. The share awards gains are subject to tax in Macau in the year in which the share award vests to the individual. The taxable share award amount is calculated as follows:

Taxable share award income = (market value on vesting date ­ consideration for share awards) x number of shares vested

Employers are required to notify the Macau tax authorities within 30 days after granting stock options or share awards.

Capital gains. Macau does not levy capital gains tax.

However, the Macau Complementary Tax Law does not distin­guish a “capital gain” from a “revenue profit.” Sole proprietor­ships and companies carrying on commercial or industrial activities in Macau are subject to complementary tax on their capital gains derived in Macau.

Purchasers of real property must pay stamp duty, which is levied on the sales price or assessable value of the property at the rates listed in the following table.

Sales price or assessable value

Exceeding      Not exceeding                                  Rate

MOP                     MOP                                                 %

0                       2,000,000                                                1

2,000,000          4,000,000                                               2

4,000,000                    —                                                  3

For 2016, a first-time purchase of residential property by a Macau resident for a cost of up to MOP3 million is exempt from stamp duty.

Deductions

Personal deductions and allowances. A 25% exemption and a personal allowance of MOP144,000 may be deducted from em­ployment income.

Business deductions. Expenses incurred wholly and exclusively for the purpose of producing taxable income are deductible in Macau.

Rates. Professional tax rates are set forth in the following table and apply to both residents and nonresidents.

Taxable income Tax rate Tax due Cumulative tax due
MOP % MOP MOP
First 144,000 0 0 0
Next 20,000 7 1,400 1,400
Next 20,000 8 1,600 3,000
Next 40,000 9 3,600 6,600
Next 80,000 10 8,000 14,600
Next 120,000 11 13,200 27,800
Remainder 12

Tax rebate. For 2016, an additional 30% relief is granted on the total amount of tax payable.

Relief for losses. Employees may not carry back or carry forward losses. However, an individual carrying on a business as a sole pro­prietor may carry forward and deduct losses from assessable prof­its in the following three years if he or she is a Class A taxpayer or a professional practitioner with proper accounting records.

Estate and gift taxes

Effective from 1 August 2001, estate and gift taxes were abol­ished.

Social security

Employers must contribute monthly to a government social secu­rity fund in the amounts of MOP30 for every resident worker and MOP200 for every nonresident worker. Resident workers must each contribute MOP15 per month. No ceiling applies to the amount of wages subject to social security contributions.

Macau has not entered into any social security totalization agree­ments with other countries.

Tax filing and payment procedures

Tax is levied on income arising in or derived from Macau during the calendar year.

Employers in Macau must withhold professional tax at the rates set forth in Rates from salaries paid to employees. In addition, employers must withhold professional tax at a rate of at least 5% from amounts paid to nonresidents without work permits. Pro­fessional tax collected by employers must be remitted quarterly under Article 32 of the Professional Tax Regulations and/or monthly under Article 36 of the regulations to the Macau Finance Department. Employers in Macau must prepare and submit an­nual tax returns with respect to salaries paid to residents and nonresidents and the professional tax withheld.

Double tax relief and tax treaties

Macau has entered into double tax treaties with Cape Verde, Mainland China, Mozambique and Portugal. Macau has also signed a tax treaty with Belgium, but this treaty is not yet in force.

Visitor visas

All travelers entering Macau must hold valid passports or other equivalent travel documents. Nationals from the jurisdictions listed below do not require a visa to visit. The length of time one is permitted to stay in Macau under visitor status depends on the jurisdiction that issued the passport.

Albania                          Iceland                        Netherlands

Andorra                         India                           New Zealand

Australia                        Indonesia                    Norway

Austria                           Ireland                        Philippines

Belgium                         Israel                           Poland

Bosnia and                     Italy                            Portugal

Herzegovina                  Japan                          Romania

Brazil                             Kiribati                        Russian Federation

Brunei                            Korea (South)             Samoa

Bulgaria                         Latvia                          San Marino

Canada                           Lebanon                      Serbia

Cape Verde                    Liechtenstein               Seychelles

Chile                              Lithuania                     Singapore

Croatia                           Luxembourg               Slovak Republic

Cyprus                           Macedonia                  Slovenia

Czech Republic              Malaysia                     South Africa

Denmark                        Mali                            Spain

Dominica                       Malta                          Sweden

Egypt                             Mauritius                    Switzerland

Estonia                           Mexico                       Tanzania

Finland                          Moldova                     Thailand

France                            Monaco                      Turkey

Germany                        Mongolia                    United Kingdom

Greece                           Montenegro                United States

Grenada                         Morocco                     Uruguay

Hungary                        Namibia

Residents of Hong Kong may stay in Macau for up to one year with out a visa.

Nationals from countries other than those listed above may obtain visitor visas on arrival in Macau at the cost of MOP100 for an adult, MOP50 for a child under 12 years of age, MOP200 for family groups and MOP50 per person for tourist groups of 10 or more. These individuals may stay in Macau for 30 days.

Foreign nationals staying in Macau under visitor status may not engage in any form of employment in Macau, except for those who qualify for an exemption (see Section G).

Work permits

Before a Non-resident Worker’s Identification Card (blue card) is granted by the Immigration Department, a work permit must be obtained from the Macau Labour Affairs Bureau (LAB), the government authority that handles the employment of foreign nationals and local workers.

Before a work permit application is made to the LAB, the em­ployer must register the vacant position with the employment section of the LAB and must indicate the identity of the em­ployer, title of the position, remuneration, working hours, and qualifications and experience required. Vacancy order forms are available in the LAB’s employment section. An employer that is unable to find a local employee with comparable experience and qualifications to fill a vacancy may apply for a work permit to bring in a qualified nonresident. The employer must prove that the LAB was notified of the vacant position and was unable to provide a prospective employee.

To obtain work permits from the LAB for their foreign employ­ees, employers must generally submit the following documents to the LAB:

  • A prescribed application form completed in full with details of the employer, reason for employing the foreign national, and number and positions of existing resident and nonresident employees
  • Photocopy of the employer’s commercial registration document from the Identification Bureau and photocopy of the legal rep­resentative’s identity card
  • Photocopies of the employer’s business registration, industrial license or equivalent registration document, and business tax payment record
  • Evidence of the employer’s contribution to the Social Security Fund
  • Photocopy of proof for local recruitment from the Labour Affairs Bureau
  • Photocopy of the foreign employee’s passport or other travel document
  • A copy of the employment contract with details of the position, salary, terms of employment and benefits
  • Evidence of the foreign employee’s qualification and experience

If an application is approved by the LAB, a letter of approval is issued to the applicant for submission to the Immigration Department to process the foreign employee’s blue card. A for­eign national may not undertake employment in Macau until a blue card application is submitted. The work permit and blue card are normally granted for employment with a specific employer.

Applying for a work permit in Macau may be a lengthy process. Applications are considered on a case-by-case basis. In general, it takes approximately three to six months to obtain the work permit after all the required documents have been submitted. No fee is charged for the granting or renewal of a work permit. A fee of MOP100 is charged for the granting and renewal of a blue card.

Work permits are normally granted for a maximum period of two years and are renewable by the LAB. The application form for the renewal of a work permit, together with a renewed employment contract and other required documents, must be submitted to the LAB four to five months before the expiration date of the work permit. The applicant must also apply for renewal of a blue card from the Immi gration Department when the work permit is renewed by the LAB.

An expatriate who wants to work in Macau is exempt from the work permit requirements under the following circumstances:

  • An enterprise with a registered office located outside of Macau and an enterprise with a registered office in Macau enter into an agreement with respect to the performance of specified or occasional guidance, technical, quality control or supervisory duties.
  • An individual or collective person with a registered office in Macau invites a nonresident to engage in religious, sports, aca­demic, cultural interchange or artistic activities.

The above work permit exemptions are limited to a maximum period of 45 consecutive or non-consecutive days in each period of six months.

Foreigners who enter Macau to set up their own businesses are also required to obtain approval from the Macau Trade and Investment Promotion Institute (Instituto de Promocao do Comercio e do Investimento de Macau, or IPIM). They must fol­low the procedures for recruiting nonresident skilled workers and submit the following documents:

  • Copy of the applicant’s identification document
  • Copy of the latest Business Tax Registration or Declaration of Start/Alteration of Activity Form M/1
  • Proof of the activities performed by the applicant, such as aca­demic certificates or work reference letters
  • Proof of applicant’s economic capacity in Macau
  • Copy of the contributions to the Social Security Fund
  • Personal information of recruited local workers, including posi­tions, remuneration and identity documents

Residence permits

The government’s policy is to encourage people of financial standing, who will make substantial investment in the territory, to become residents of Macau. To qualify, an applicant must dem­onstrate his or her financial ability to invest significantly in an enterprise in Macau. Management and/or technical personnel employed or likely employed by a Macau-registered company with qualifications and professional experience that contribute to Macau’s economy may also be granted a residence permit on application.

Foreign nationals applying for residence permits must have the prior approval of the Macau Trade and Investment Promotion Institute (IPIM). To obtain this approval, the applicant must file with the IPIM an application describing all pertinent information relating to the investment or the foreign national’s qualification and experience. An appointment must be made with the IPIM to submit the required documents. After all the required documents have been submitted, the IPIM generally takes about six months to one year to process the application.

If the IPIM is satisfied that all prerequisites for the grant of a residence permit are fulfilled, the applicant must go to the Immigration Department of the Public Security Police Force with the Approval Notification of Residence Authorization issued by IPIM to apply for the Receipt of Residence Authorization (Residence Receipt). The issuance of the Residence Receipt takes approximately seven working days. After obtaining the Residence Receipt, the applicant can go to the Identification Bureau of Macau to apply for a Macau Non-permanent Resident Identity Card. This process generally takes 15 working days.

The temporary residence permit is normally granted for an initial period of 3 years (renewable once for 18 months if the applicant is proposing to invest in a major investment project in Macau), depending on the validity of the applicant’s travel document. A residence permit expires 30 days before the expiration of an applicant’s travel document.

Temporary residence permits may be extended on application by the permit holders. An application for renewal, together with all documents required, must be submitted to the IPIM for endorse­ment within 180 days before the expiration date of the temporary residence permit. The granting or renewal of a temporary resi­dence permit is not subject to any fees by the issuing authorities.

In general, a temporary residence permit holder may, after seven years of continuous residence in Macau, apply for permanent residence status.

The Macau Special Administrative Region (SAR) government has suspended the application for a residence permit based on an investment in real estate until further notice.

Family and personal considerations

Family members. In general, foreign nationals who hold blue cards or residence permits may be accompanied to Macau by their family members on application. Family members include a spouse, children and parents that are financially supported by the applicant. Unskilled workers may not have dependents accom­pany them to Macau. Accompanying family members are nor­mally permitted to stay in Macau for the duration of their family member’s work permit or residence permit.

Driver’s permits. Foreign nationals may drive legally using their home country driver’s licenses if they hold valid international driving permits. The foreign nationals must register their licenses with the Transport Bureau. Temporary driver’s permits may be obtained by presenting the Transport Bureau with the foreign nationals’ passports or equivalent travel documents, foreign driv­er’s licenses and international driving permits. Holders of driver’s licenses issued by certain countries, including EU member coun­tries, Australia, Canada and the United States, may be exempt from the requirement of holding international driving permits. Tempo­rary driver’s permits are generally valid for three months and may be renewed on request. No fee is charged for the issuance or renewal of the permits.

Foreign nationals holding residence permits who have resided in Macau for at least six months may exchange their foreign driver’s licenses for Macau driver’s licenses. Foreign driver’s licenses issued by certain countries may be accepted on a reciprocal basis. Macau licensing authorities normally recognize foreign licenses issued by countries with requirements comparable to those of Macau (passing a practical driving test is essential).

To exchange a foreign license for a Macau one, the applicant must submit the following documents in person or through his or her attorney to the Transport Bureau:

  • Completed prescribed application forms (Form 3A and Form 011/DLC).
  • Original and copy of the applicant’s valid foreign driver’s license. An official translation of the license into Chinese or Portuguese must be included if the license is in a language other than Chinese, Portuguese, English or French.
  • Originals and photocopies of the applicant’s identification documents and original Macau residence permit.
  • Medical certificates completed by a local registered medical practitioner confirming the applicant’s mental and physical capability of driving.
  • Two identical, recent passport-type photographs of the applicant.
  • Application fee of MOP1,000.

In general, the Transport Bureau takes about one month to pro­cess the application.