Macau SAR

New Tax Code became effective on 1 January 2026

On 16 December 2024, the Legislative Assembly of the Macau Special Administrative Region ("Macau SAR") passed the bill for approval of the New Tax Code with the effecitve date on 1 January 2026. The New Tax Code not only clarifies and strengthens the tax legal system in the Macau SAR, but also establishes a modern tax system in line with international tax standards.  The key highlights of the New Tax Code include:

• Territorial Principle: The New Tax Code clearly states that the Macau taxation system will adhere to the territorial principle.
• Transfer Pricing Regulations: The New Tax Code introduces provisions on transfer pricing, specifying that commercial or financial transactions between taxpayers in the Macau SAR and its related parties in other tax jurisdictions should be conducted according to the arm’s length principle.
• Consolidation of Existing Tax Laws: The New Tax Code consolidates existing tax legislations, clearly defining the rights and obligations within tax-related legal relationships. It establishes principles and procedures for tax processes, litigation, and enforcement, safeguarding tax revenue for the Macau SAR while protecting the legitimate rights of taxpayers.
• Alignment with International Standards: The New Tax Code modernises the Macau tax system in line with the latest international tax standards by introducing a series of international tax-related concepts such as Permanent Establishment, Tax Agent and Tax Resident.

Investment Fund Law became effective on 1 January 2026

On 14 July 2025, the Legislative Assembly of the Macau SAR passed the bill for approval of the Investment Fund Law with the effecitve date on 1 January 2026 to facilitate the development of the modern financial services industry and promote moderate economic diversification in Macau SAR.  The Investment Fund Law replaces the Decree Law No. 83/99/M, which has been in force for nearly 25 years, to achieve the following four key objectives:

• Aligning with International Regulatory Standards: The Decree Law No. 83/99/M prohibited investment funds from acquiring assets issued or held by related entities. The Investment Fund Law allows investment funds to engage in related-party transactions, provided that specific conditions are met. This change enhances investment flexibility while ensuring the prevention of conflicts of interest and safeguarding investor interests.
• Enhancing Investor Protection: The Investment Fund Law significantly strengthens disclosure requirements for investment fund prospectuses and key fund information summaries. These include disclosures on risk factors, risk levels and warnings, asset valuation methodologies, rules governing unitholder meetings, policies on related-party transactions, and applicable fund operation fees. Additionally, new provisions have been introduced to regulate unitholder meetings, including procedures for convening meetings, notice requirements, and quorum rules for resolutions.
• Removing Barriers to Fund Operation and Development: Under Decree Law No. 83/99/M, an investment fund’s license would lapse if the investment fund company failed to reach either a minimum of 30 unitholders or a capital threshold of MOP 10 million within six months of its establishment. Furthermore, funds registered in Macau SAR were subject to an annual supervisory fee equivalent to 0.1% of the net asset value under management which became disproportionately costly for larger funds. The Investment Fund Law removes both the minimum unitholder and capital requirements, as well as the annual supervisory fee.
• Optimizing the Development Environment for Fund Management: The Investment Fund Law expands the permitted business scope of fund management companies to include other asset management activities beyond investment funds. It also broadens the qualifications for custodians, allowing fund managers to engage custodians located outside Macau SAR.  In addition, The Investment Fund Law introduces provision on private equity funds, including a clear definition, legal basis for their establishment and operation, and regulatory principles and requirements. Furthermore, the Investment Fund Law allows investment funds to be established in the form of a contract, company, or partnership structure.

To further attract international investment fund management companies to establish a presence and commence operations in the Macau SAR, the Legislative Assembly approved certain tax incentives for the investment fund management company, investment fund and investor in the Budget for the financial year 2026, including:

• Complementary tax rate for the taxable income derived from licensed business activities for the investment fund management company will be reduced to 5% for the tax year 2026. Same preferential tax rate will be applicable to the pre-tax dividends to be received by the shareholders of the investment fund management company.
• The carried interest earned by the investment fund management company will be exempted from the complementary Tax for the tax year 2026.
• The stampable documents arising from activities related to the operation of the investment fund management company will be exempted from the stamp duty for the tax year 2026, except for the stamp duty on transfer of movable and immovable properties.
• The acquisition of one immovable property intended for the investment fund management company's own business use will be exempted from the stamp duty on transfer of immovable property for the tax year 2026.
• The investment funds and their special purpose vehicles (SPVs) will be exempted from property tax and stamp duty on leasing the immovable properties for the tax year 2026.
• The interest income, profit distributions and capital gains to be received from the disposal of Macau-domiciled investment funds by the investors will be exempted from complementary tax for the tax year 2026.

Tax incentives for the tax year 2026

The Legislative Assembly approved certain tax incentives proposed by the Chief Executive of Macau Special Administrative Region (SAR) in the Budget for the financial year 2026. The key tax incentives include the following:

• The tax-free income threshold for complementary (corporate) tax has been increased from 32,000 Macanese patacas (MOP) to MOP 600,000 for income derived in the tax year 2025. Taxable income over MOP 600,000 is taxed at 12%.
• There will be enhanced tax deduction for research and development (R&D) expenditure incurred for innovation and technology projects by complementary tax Group A taxpayers for the tax year 2026 (300% tax deduction for the first MOP 3 million of qualifying R&D expenditure, and 200% tax deduction for the remaining amount, subject to a limit of MOP 15 million in total).
• Income received from or derived in Portuguese speaking countries will be exempt from complementary tax for the tax year 2026, provided such income has been subject to tax in its place of origin.
• Interest income derived from debt instruments issued in Macau SAR or income derived from sale, redemption, or disposal of debt instruments issued in Macau SAR will be exempt from complementary tax for the tax year 2026.
• The standard MOP 3,500 reduction in property tax liabilities will continue to be available in the tax year 2026 for both self-use and rental properties. This incentive does not apply to corporate and non-Macau residents.
• Property tax rate for rental properties will be reduced to 8% for the tax year 2026.
• Restaurants will continue to be exempt from tourism tax in the tax year 2026.
• Insurance policies written or renewed in the tax year 2026 and banking transactions in the tax year 2026 will continue to be exempt from stamp duty.
• Admission tickets for performances, exhibitions, and entertainment programs will continue to be exempt from stamp duty in the tax year 2026.
• Debt instruments issued, sold, or transferred in Macau SAR will be exempt from stamp duty for the tax year 2026.
• Commercial and industrial operations will continue to be exempt from the annual industrial tax in the tax year 2026.
• Complementary tax rate for the taxable income derived from operation of Corporate Treasury Centers (CTCs) in Macau SAR will be reduced to 5% for the tax year 2026.