In recent years, the Macau SAR government has been putting efforts into promoting transparency and exchange of tax information. The effort has paid off with the OECD Global Forum review panel agreeing on Macau meeting international standards in tax information exchange. The special administrative region has a flourishing gaming and tourism scene. There is also no shortage of young talents from neighbouring cities as many are choosing to work in Macau for its booming economy and job opportunities. Along with the relatively low tax rates, Macau proves to be a very attractive location for investment and business expansion.
It is of fundamental importance for an employer to understand the tax obligations and taxation system where the business is. To help employers and HR leaders grasp the basics of taxation in Macau, Links has put together some essentials of what you need to know about Macau’s tax rates, corporate taxes and income taxes.
Please note that this page serves as a general guide only, for more details on Macau’s taxation system, please visit official government websites:
Tax Obligations as An Employer in Macau
The Financial Services Bureau (DSF) is the government tax authority of Macau SAR. The government body provides guidelines and relevant legislative information for employers and business owners. The following are some of the tax obligations of an employer in Macau.
Employers should withhold the payable tax amount from the employee’s income for:
- part-time employees with a daily wage (and other taxable income) exceeding MOP$640; and
- employees with a monthly wage exceeding MOP$16,000.
Tax payment of the withholding tax should be made quarterly and remitted to the tax authority by the 15th of January, April, July and October annually.
An employer should file the annual remuneration of all employees by submitting the M3 or M4 form between January and February each year. Should the business terminate, employers are required to file the remuneration within 15 days of the business closure.
Social Security Liability
All employers in Macau must complete the employer registration with Macau’s Social Security Fund (FSS) in the month following the commencement of the employment relations in order to fulfil their contribution obligations. Employers are obligated to enrol and pay contributions for an employee in the contribution month immediately following the commencement of the labour relation. The below table shows the monthly contribution amount to the Macau Social Security Fund for resident employees.
Macau Social Security Fund Contribution (Resident Employees)
|Total Contribution (per month)||Employer’s Contribution||Employee’s Contribution|
|Casual Employee(works 15 days or more per month)||MOP$90||MOP$60||MOP$30|
|Casual Employee(works less than 15 days per month)||MOP$45||MOP$30||MOP$15|
Employers can deduct the employee’s share of contribution amount from his/her wages which will then be remitted to FSS by the employer. Payment of contributions is payable quarterly for long-term employees (January, April, July and October annually) while contributions for casual workers are payable in the month that immediately follows the employee’s working month.
An Employment Fee of MOP$200 per month is applicable to non-resident employees, fully paid by the employer. Employment fees are also payable quarterly in January, April, July and October.
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Macau Corporate Tax Rates
Carrying out commercial or industrial activities in Macau comes with certain tax obligations. The major obligations affecting all businesses in Macau are the industrial tax and profits tax. However, in recent years, industrial taxes have been exempted by the Macau SAR government and the profits tax threshold has also been increased in 2018. In addition, the Macau SAR government have signed a number of agreements of avoiding double taxation with partner countries and regions, furthering benefiting individuals and companies operating businesses in Macau.
The industrial tax in Macau is a kind of business registration fee applied to companies and individuals engaging in any commercial and industrial activities in Macau regardless of the residency for tax purposes. It is a fixed-amount tax payable before the commencement of new business and annually for each year thereafter.
New business owners must first register their activities with the DSF 30 days before the commencement of operations. Both the industrial tax for commencing businesses and annual industrial tax have been exempted in the 2019 tax year.
Corporate Profits Tax
Profits Tax or Complementary Tax is imposed on the worldwide net profits derived by companies carrying out commercial and industrial activities registered in Macau. According to the Complementary Tax Law, the Profits Tax is levied on a progressive scale from 3% to 12%.
Macau Complementary Tax Rates
|MOP$ 0 – MOP$ 32,000||0%|
|MOP$ 32,001 – MOP$ 65,000||3%|
|MOP$ 65,001 – MOP$ 100,000||5%|
|MOP$ 100,001 – MOP$ 200,000||7%|
|MOP$ 200,001 – MOP$ 300,000||9%|
|MOP$ 300,001 or above||12%|
As part of the 2019 tax relief measures, the Profits Tax exemption allowance has been increased to MOP$600,000 for income derived in 2018, any annual taxable income beyond the exempted amount is taxed at a flat rate of 12%. Under the same relief measures, in 2019, income obtained or generated in Portuguese-speaking countries are exempted from Profits Tax, when the relevant profits tax have been paid in those countries.
Employees’ Income Tax in Macau
As an employer, it is important, and a responsibility, to understand and facilitate your employee’s tax obligations in addition to your own.
Individual income tax is also known as Professional Tax in Macau, both resident and non-resident individuals are taxed at the same progressive scale. Non-resident employees are also subject to a 5% tax rate on their taxable income even if their remuneration does not exceed the exempted amount, i.e. under MOP$144,000.
Macau Income Tax Rates
|Net Chargeable Income||Rate|
|MOP$ 0 – MOP$ 144,000||0%|
|MOP$ 144,001 – MOP$ 164,000||7%|
|MOP$ 164,001 – MOP$ 184,000||8%|
|MOP$ 184,001 – MOP$ 224,000||9%|
|MOP$ 224,001 – MOP$ 304,000||10%|
|MOP$ 304,001 – MOP$ 424,000||11%|
|MOP$ 424,001 or above||12%|
An individual with a Net Chargeable Income of MOP$184,000
MOP$144,000 x 0% + MOP$20,000 x 7% + MOP$20,000 x 8% = MOP$3000
Macau’s Financial Services Bureau provides Simulation Calculation tools for various taxes which are useful resources for employees and employers to estimate their payable amounts.
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