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Macau: Tax relief for 2019

On November 15 2018, the Chief Executive of the Macau Special Administrative Region announced the 2019 policy address at the Legislative Council with a headline of 'Seize opportunities for balanced development'. Some highlights of the tax relief measures mentioned are as follows:

  • In the area of liquidation of complementary income tax, Macau companies will be able to deduct from their taxable revenues 300% of the first MOP 3 million ($372,500) spent on qualifying research and development (R&D) activities, and 200% of any additional R&D expenditure, subject to a cap of MOP 15 million. This policy aims to support the implementation of the development plan for the Guangdong-Hong Kong-Macao Greater Bay Area, as well as to encourage innovative R&D.
  • Also concerning complementary income tax, and with an aim of promoting the growth of financial activities with special characteristics, Macau companies will be exempt from tax (also at the level of complementary income tax) on profits deriving from their investments in bonds issued by mainland authorities or state-owned enterprises made available for acquisition in Macau.
  • The issuance and acquisition of such bonds also will be exempt from the applicable stamp duty.
  • In the area of real estate, with the aim of increasing the supply in the real estate leasing market (hence cooling down the lease prices), the urban property tax rate for leased premises will be reduced from 10% to eight percent. The rate for non-leased premises will remain unchanged at six percent.

Aside from these new tax measures introduced by the government for the coming year, the tax benefits already in force will be maintained in 2019. Further details of these measures are subject to further discussion and approval via the Budget Law 2019.

João Nuno
Valéria Wong

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