Introduction to Taxation

Profits tax is levied on all income derived from commercial activities in Macao by natural persons and legal persons.

Profits Tax is taxed at progressive rates. Taxable income below MOP 32,000 is exempted from tax. Taxable profits between MOP 32,001 and MOP 300,000 are taxed from 3% to 9%. Taxable profits exceeding MOP 300,000 are taxed at a flat rate of 12%.

Tax Relief Measures included in the Government Budget of Financial Year 2026:

• The exemption amount for income subject to Profits Tax for the fiscal year 2025 is set at MOP 600,000.
• Regarding enterprises that are Profits Tax Group A taxpayers, for the tax base for Profits Tax on the first MOP 3 million expense spent for the purpose of technological innovation research and development, the deduction is triple the amount of the tax base; for the remaining expenses spent for the same purpose that have exceeded the aforementioned limit, the deduction is double the amount of the tax base, with an upper limit for total deduction set at MOP 15 million.
• Profits Tax rate of 5% applies to income earned from the operation of corporate treasury centres in the MSAR. The profits distributed to shareholders from the related businesses or the dividends distributed to shareholders of the business are also subject to the aforementioned 5% tax rate.
• For management companies of investment funds that comply with Law and simultaneously fulfil the respective requirements, a 5% Profits Tax rate on the tax base derived from the engagement of the authorized activity is applicable; a 5% tax rate is also applicable on profits and dividends distributed to shareholders from the business of the investment management company.
• Profits Tax is exempt from performance-based remuneration arising from the management of activities in the form of a private fund.
• Taxpayers of Profits Tax are exempt from Profits Tax on interest, income distribution, as well as proceeds resulting from the purchase and sale or other form of disposal of fund units obtained from investments in investment funds with domicile established in the MSAR.
• Income earned or generated in Lusophone countries is exempt from Profits Tax, provided that the respective income has already been taxed locally.
• Interest received on bonds issued in the MSAR, as well as proceeds from purchase and sale, redemption, or other forms of disposal, are exempt from Profits Tax.

Salaries tax is imposed on work income from employment or self-employment. Salaries Tax is calculated at progressive rates up to a maximum of 12%.

Salaries taxpayers are divided into two groups – employees (including casual workers and part-timers) and self-employed professionals (freelancers).

Tax Relief Measures included in Government Budget of Financial Year 2026

• The exemption on salaries tax is 30% and the allowance for its assessment is MOP 144,000. In addition, allowance for part-timers and employees who are aged 65 or above or with permanent disability level of 60% or above is adjusted to MOP 198,000.
• 60% of the salaries tax paid for the assessment year 2023 will be refunded to salaries taxpayers who hold a Macao Resident Identity Card on 31 December 2023 up to a ceiling of MOP 14,000.

Natural persons or legal persons engaging in any commercial activities must complete business tax registration and pay the business tax, whose amount is subject to the nature of business. Most activities are taxed MOP 300 annually. For commercial banks, the tax is MOP 80,000 with an additional 5% stamp duty.

Tax Relief Measures included in Government Budget of Financial Year 2026

Exemption of business registration tax.

Property tax is levied on all owners of residential, commercial and industrial properties in Macao. The tax payable for each year of assessment is the rental value of the property assessed by the Standing Committee of Property Assessment or the actual rental income generated; whichever is higher and the applicable tax rate will be 6% or 10% respectively.

Tax Relief Measures included in Government Budget of Financial Year 2026:

• Standard deduction of MOP 3,500 on property tax.
• The urban property tax rate for leased premises is reduced to 8%.

Taxes levied on imported alcoholic drinks and tobaccos:

Motor vehicle tax is levied on individuals and entities involved in different parts of consumption activity of new vehicles. Two different classes of progressive tax rates will be applied according to the type (automobile/motorcycle) and price of vehicles.

In the Macao SAR, certain business transactions are subject to a stamp duty. For example, legal persons, natural person proprietors or non-local residents who acquire any immovable residential property or its rights by compensated or uncompensated means are subject to an additional 10% of stamp duty.

In response to the social and economic development and in view of the popularisation of electronic payments, Law no. 24/2020 (Amendments to the Stamp Duty Regulation and the General Table of Payment of Stamp Duty) was brought into effect on 31 March 2021. The amendments mainly include: replacement of the revenue stamp with the Stamp Duty on Payment Slip, removal of certain stamp duty items in the original General Table of Payment of Stamp Duty, imposition of stamp duty on contracts for right transfers for stores in commercial centres, 50% stamp duty reduction for lease contracts where the disputes on leasing of immovable property are solved through arbitration.

Stamp duty for the purchase of immovable property (such as composite buildings, office buildings and parking spaces) is calculated at a progressive rate:

Tax Relief Measures included in Government Budget of Financial Year 2026:

• Exemption of stamp duty on insurance contracts and banking transactions.
• Exemption of stamp duty on the sale of property, movable property rights or immovable property rights via auction.
• Exemption of stamp duty on admissions or tickets for performances, exhibitions, or entertainment activities, including tickets whose price is collected upon departure.
• Stamp duty on acts of issuance, purchase and sale or transfer for consideration of bonds issued in the MSAR is exempted.
• Exemption from the Stamp Duty due for the development of respective activities of management companies of investment funds.
• Exemption from the Stamp Duty on Conveyance of Property for the acquisition, for consideration, of immovable properties (excluding properties designated for residential use)intended for the operation of own business activities of investment funds management companies.

Payment of the respective Stamp Duty on affixing or placement of advertisement and promotional materials whose licence fees are waived is also exempted.

A tourism tax of 5% is imposed on hotels and similar establishments (hotels, guest houses, tourism complexes, restaurants, cabarets, bars) and health clubs, saunas, massage parlours and karaoke lounges according to the price of services.

Exemption from tourism tax for two-star hotels, budget accommodations, casual dining venues, food stall operators in food courts, beverage establishments, and dining places.

Tax Relief Measures included in Government Budget of Financial Year 2026

Exemption from tourism tax for goods and services directly or indirectly provided by restaurants (luxury, first-class, second-class) regulated under Law No. 8/2021 and Decree Law No. 16/96/M of April 1.