Macau’s Complementary Tax Code Yields Net Profits, Boosting Government Revenue

The Macau Special Administrative Region (MSAR) has seen a significant increase in government revenue following the implementation of its complementary tax code. The code, which came into effect in 2019, imposes a progressive tax rate on companies operating in Macau, ranging from 9% to 12% of their annual net profits.

Revenue Generation

According to recent figures, the MSAR government has raked in a substantial amount of revenue from the taxation of companies operating in the region. The figures show that the government collected MOP 1.3 billion (approximately USD 165 million) in complementary taxes in the first half of this year alone.

Tax Code Overview

The tax code is designed to encourage companies to declare their true profits and pay their fair share of taxes. It applies to all companies incorporated in Macau, as well as foreign corporations operating in the region through a permanent branch office or on a sporadic basis.

Exemptions and Tax Rates

In practice, companies with an annual net profit of up to MOP 600,000 are exempt from complementary tax. However, those with profits exceeding this amount are subject to taxation at a rate of 12%.

Compliance Measures

The government has implemented various measures to ensure that companies comply with the tax code and pay their taxes on time. For instance:

• Companies must file their annual tax declarations during specific periods
• They must also make timely payments of their complementary tax liabilities

Expert Insights

Experts believe that the success of Macau’s complementary tax code can be attributed to its simplicity and fairness. The code is easy to understand and apply, and it provides a clear framework for companies to follow when calculating their taxable income.

Future Plans

The revenue generated from the complementary tax code will likely be used to fund various government initiatives aimed at promoting economic growth and development in Macau.