2016 Macau SAR Special Annual Budget Law Tax Exemptions: Corporate Tax, Professional Tax and Property Tax
by David Silva Lopes
Besides other exemptions contemplated under the law that approved the 2016 budget for Macau SAR (Law No. 15/2015, of 28 December 2015), the core special exemptions applicable cover Corporate Tax, Professional Tax and Property Tax.
The taxable profits accrued in the companies’ annual accounts re. year 2015 are fully exempted from Corporate Tax up to the amount of MOP600,000 (circa USD75,000), a threshold that has been increasing over the years – from MOP200,000 in 2012, it was increased to MOP300,000 in 2013 and MOP600,000 in 2014. Over the MOP600,000 threshold the taxable profits are subject to Corporate Tax at a flat rate of 12%. In addition, companies are exempted of the Industrial Tax in 2016.
As in 2015, in 2016 employees and professionals have a part of their income (30%) that is deemed not subject to Professional Tax, which means 5% more than the 25% set under tax law (Section 4 paragraph o) of the Professional Tax Regulation). Over the 70% of income subject to Professional Tax, Law No. 15/2015 grants an additional tax exemption over the taxable income up to the limit of MOP144,000 (circa USD18,000). Above this threshold the taxable income will be subject to the following progressive tax rates: 10% up to MOP160,000, 11% for the part between MOP160,001 and MOP280,000 and 12% for the part over MOP280,000.
Transfer Stamp Duty
For transactions occurring during 2016 for the acquisition of a residential property there is a special exemption of Property Transfer Stamp Duty up to the amount of MOP3 million (circa USD375,000), above which the standard progressive tax rates will be applied: 2% from MOP3,00,001 up to MOP4,000,000 and 3% over MOP4 million. Requirements for this special exemption: the buyer must be (i) an individual; (ii) adult (18 years); (iii) holder of Macau Permanent Resident Identity Card; and (iv) not owning any property in Macau for whichever purpose (except car park).
Annual Property Tax
Law No. 15/2015 also establishes a special exemption for property owners on annual Property Tax, by way of deduction of MOP3,500 per property, which is automatically deducted by the Tax Department prior sending out the notices of assessment of Property Tax. Persons excluded from this exemption: companies, individuals registered as entrepreneurs or individuals that are not holding a Macau resident ID.
David Silva Lopes
P: +853 8590 0709