Macau Taxation

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The tax year in Macao starts on January 1 and ends on December 31. Taxes collected on businesses are calculated from the date when the businesses are started to the end of the year.

Macao taxation system-sourcing from Portugal
Macao taxation system was introduced from Portugal, and its framework has remained the same despite changes made in the system. Yet there has been major change in the Portuguese taxation system since the 1970s. As a result, the taxation system currently in force in Macao is somewhat different from that in Portugal.

Macao sources of taxation
Seventeen taxes are collected in Macao. In terms of sources of taxation, taxes are collected on earning, property, wealth, assets and services, etc. The taxes in Macao are also classified into direct taxes and indirect taxes. The direct taxes include business tax, job tax, housing tax, additional income tax, gambling tax, franchise tax, inheritance and gift tax and real estate transfer tax, etc. The indirect taxes include stamp tax, tourist tax, consumption tax. In addition, charges are collected on issuing certificates, conducting legal and administrative affairs and inspections.

Similarity of Macao Taxation to others
Macao taxation system is quite similar to that of Hong Kong, which is small in the types of taxes collected and low in tax rate. Both areas mainly collect direct taxes which are supplemented by indirect taxes.

Currently, there are several types of taxes in Macau:

1. Business tax
- Anyone wishing to do business in Macao must register for paying business tax. The business        
  tax is not the business license. After paying the business tax, the applicant must also apply for   
  business license in order to start a business. Job tax This tax is levied on people who earn
  income by working. The taxable income includes regular or additional income, direct or
  indirect income and income in kind.

2. Housing tax
- It is a direct tax levied on housing derived income. All the housing, whether for renting or for
  own use, is subject to this tax.

3. Additional income tax
    - It is also known as net profit tax. This tax is collected to ensure that taxpayers with different income can pay tax in a fair and equitable way.

4. Real estate transfer tax
- This tax is collected on the transfer of housing or land right. The tax is collected according to 
  the higher value of the two prices: the market value of the real estate assessed by the
  government or the price of transaction agreed by the seller and purchaser.