Macau SAR

Tax incentives for the tax year 2025

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 2025. 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 2024. 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 2025 (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 2025, 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 2025.
• The standard MOP 3,500 reduction in property tax liabilities will continue to be available in the tax year 2025 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 2025.
• Restaurants will continue to be exempt from tourism tax in the tax year 2025.
• Insurance policies written or renewed in the tax year 2025 and banking transactions in the tax year 2025 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 2025.
• Debt instruments issued, sold, or transferred in Macau SAR will be exempt from stamp duty for the tax year 2025.
• Commercial and industrial operations will continue to be exempt from the annual industrial tax in the tax year 2025.

New Tax Code to be effective on 1 January 2026

On 16 December 2024, the Legislative Assembly of the Macau SAR passed the bill for approval of Código Tributário (Tax Code) (hereinafter referred to as the “new bill”) with the effective date on 1 January 2026.  The new bill changes the Macau tax system from worldwide to territorial and introduces new international tax concepts, including but not limited to transfer pricing, tax residency and permanent establishment, to promote the modernization of Macau's tax system and make it more aligned with the latest international tax standards.