Tax incentives for the tax year 2020
On 16 December 2019, the Legislative Assembly approved certain tax incentives proposed by the Chief Executive of Macau SAR in the Budget for the financial year 2020. The key tax incentives in relation to Macau professional tax include the following:
- The tax-free income threshold for Macau professional tax will be increased from 95,000 Macanese patacas (MOP) to MOP 144,000 for income derived in the tax year 2020. For employees over the age of 65 or proved to be 60% disabled or above, the tax-free income threshold will be further increased to MOP 198,000 for the tax year 2020.
- There will be a 30% reduction in the Macau professional tax liabilities for income derived in the tax year 2020. Together with the standard 25% deduction on the taxable income granted under the Macau Professional Tax Law, the effective tax rate for Macau professional tax is below 6.3%.
Enhanced tax incentives due to outbreak of COVID-19
Due to the negative impacts of COVID-19 to the economy of Macau SAR, the Legislative Assembly approved additional tax incentives proposed by the Chief Executive in the revised Budget or the financial year 2020 on 16 April 2020. The key additional tax incentives include the following:
- Macau professional tax refund for Macau residents is increased from 60% to 70%, with upper limit of MOP 20,000, for the tax year 2018.
- The standard deduction on taxable income under the Macau Professional Tax Law is increased from 25% to 30% for the tax year 2020.