The paragraphs below describe the tax acceptable treatments under the prevailing Complementary Tax Law and are for reference only.
Inventory should be stated at actual cost, and conformity between book and tax reporting is required. Market selling price or replacement cost is allowed only in special circumstances, and prior approval of the Director of the MFB is required for adoption of such inventory valuation methods. The write-down of inventory values is not permitted.
Gains or losses from the realisation of capital assets of a corporate taxpayer are treated as current revenue or expense items for complementary tax purposes.
Dividends from all sources are subject to complementary tax in the hands of a recipient incorporated in Macau SAR unless the dividends were paid out of profits that have been taxed at the corporate level in Macau SAR. Where dividends to shareholders are paid out of profits of a Macau entity that have not been taxed in Macau SAR, complementary tax will technically be charged on the dividend distribution to the shareholders.
Interest income received by or accrued to a corporate taxpayer in Macau SAR is subject to complementary tax.
Royalty income received by or accrued to a corporate taxpayer in Macau SAR is subject to complementary tax. There is currently no withholding tax (WHT) imposed on royalties paid or accrued to a non-resident provided that such non-resident has not carried on commercial/industrial activities in Macau SAR.
Companies incorporated in Macau SAR are subject to complementary tax on worldwide income, wherever received or credited. There are no provisions in the Macau Complementary Tax Law that allow foreign income to be deferred for tax purposes. Currently, double taxation relief is available under the respective double taxation agreements (DTAs) that Macau SAR has with Cabo Verde, the People's Republic of China, Mozambique, Portugal, Vietnam, Hong Kong SAR and Cambodia.