Macau operates a territorial tax system: only Macau-source income is taxed. Macau has no CFC regime. Macau operates a self-assessment system, with the Financial Services Bureau (DSF) conducting post-filing review.
The Macau tax year is the calendar year.
12% top rate (Complementary Tax) on taxable profits exceeding MOP 300,000, with progressive rates of 3% to 9% below that threshold. The tax-free income threshold was increased from MOP 32,000 to MOP 600,000 for the 2025 tax year. Corporate Treasury Centres and licensed investment fund management companies meeting specific conditions may qualify for a reduced 5% concessionary rate for the 2026 fiscal year.
Employment income is taxed separately under Professional Tax (Imposto Profissional), not the Complementary Tax that applies to business/corporate profits. For 2026, the first MOP 144,000 of annual income is exempt (MOP 198,000 for those 65+ or 60%+ disabled), and a standard 25% deduction applies before computing tax. Progressive bands above the exemption run 7%, 8%, 9%, 10%, 11%, and 12% (over roughly the first MOP 20,000/20,000/40,000/80,000/120,000 of taxable income in each band, with the remainder at 12%), and a 30% budget rebate further reduces the computed liability for the 2026 tax year.
0% - Macau has no VAT or GST.
Macau's new Tax Code introduced a major structural reform: it formally introduced the concept of "tax resident" into Macau's tax system for the first time, alongside permanent establishment and tax agent concepts - modernizing a system where, historically, "the residency concept remains largely irrelevant" for pure domestic Macau tax purposes. From January 1, 2026, Macau also transitioned to a full territorial taxation system: only income, property, or consumption derived from within Macau is taxable, with economic activity occurring outside Macau's jurisdiction untaxed - EXCEPT for Macau tax residents that are constituent entities of a multinational enterprise (MNE) group, who remain taxable on foreign-source income (dividends, interest, royalties, and property-disposal gains) under complementary tax, with a unilateral tax credit available to mitigate double taxation. All taxpayers, including corporations, are now required to file a Tax Residence Declaration with the Financial Services Bureau under the new regime.
A non-Macau entity has a Macau permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Macau on the entity's behalf, following the OECD Model Treaty definition as applied under Macau domestic law and any applicable tax treaty.
There are no CFC rules in the Macau tax regime.
No statutory thin capitalization ratio is identified in available sources for Macau. Notably, transfer pricing rules became effective for the first time on January 1, 2026 under the new Tax Code.
Macau does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics. Macau does not have a comprehensive ATAD2-style anti-hybrid regime.
No foreign bank account or foreign financial asset reporting regime exists requiring residents to separately disclose foreign accounts; consistent with Macau's territorial (or primarily source-based) system described in Tax System above, foreign-source income generally falls outside the domestic tax base rather than being reported and then taxed.
Macau's territorial system already excludes foreign-source income from the domestic tax base entirely, functioning as a broader substitute for a conventional participation exemption.
Macau's territorial tax system limits the practical role of a foreign tax credit, since foreign-source income is generally outside the Macau tax base to begin with.
Per PwC's Macau SAR tax summary, Macau has entered into comprehensive bilateral tax arrangements with 7 partners: Cabo Verde, Cambodia, Mainland China, Hong Kong SAR, Mozambique, Portugal, and Vietnam - a genuinely small network compared to larger jurisdictions. Separately, Macau has signed Tax Information Exchange Agreements (TIEAs) with 15 countries. If an individual is a resident of a treaty-partner country, their residency status for treaty purposes is determined by that specific agreement's provisions rather than Macau's own domestic rule; where no treaty applies, Macau's default source-based taxation approach governs. Treaties generally follow OECD Model Tax Convention tie-breaker sequencing (permanent home, center of vital interests, habitual abode, nationality) for dual-residence cases.