Resident companies are taxed on their worldwide income earned from within and outside of Macau.
There are two categories of taxpayers under the Macau tax laws, namely Group A and Group B taxpayers.
Group A taxpayers are companies with:
- Capital of no less than MOP 1 million; or
- Average taxable profits of more than MOP 1 million over the preceding 3 years.
Group A taxpayers are required to maintain regular accounting books and records, have those audited, and are assessed to tax on the basis of their financial statements and tax returns.
Group B taxpayers are those not meeting either test mentioned under Group A above. They are assessed to tax on a deemed profit basis.
Companies not meeting the minimum capital or average taxable profits thresholds but which maintain regular accounting books and records may opt to be treated as Group A taxpayers by filing an application (known as application for integration in Group A) with the Macau Finance Services Bureau.
Any income derived from Portuguese-speaking countries is exempt from corporate income tax for the tax year 2021, provided that the taxpayer submits evidence of the income being subject to tax in the source country. As of 30 June 2018, there are nine Portuguese-speaking countries, namely, Portugal, Cape Verde, Mozambique, Angola, Brazil, Timor-Leste, Guinea-Bissau, Sao Tome and Principe, and Equatorial Guinea.
Dividend income received from resident companies is taxable in the hands of the recipient/shareholders unless such dividends are paid out of profits that have already been subject to complementary tax (corporate income tax) in Macau. Foreign sourced dividends received by a resident company are taxed in Macau regardless of whether such dividends are taxed in the foreign country.
Subject to conditions (see Sec. 8.2.), dividends paid out are deductible to the distributing entity for complementary tax purposes.
Capital gains derived from the sale of capital assets by resident companies are taxed as business income subject to corporate income tax, and capital losses are considered as business expense.