Tax incentives for the tax year 2023
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 2023. 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 2022. 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 2023 (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 2023, 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 2023.
- The standard MOP 3,500 reduction in property tax liabilities will continue to be available in the tax year 2023 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 2023.
- Restaurants will continue to be exempt from tourism tax in the tax year 2023.
- Insurance policies written or renewed in the tax year 2023 and banking transactions in the tax year 2023 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 2023.
- Debt instruments issued, sold, or transferred in Macau SAR will be exempt from stamp duty for the tax year 2023.
- Commercial and industrial operations will continue to be exempt from the annual industrial tax in the tax year 2023.