Bills Aim to Modernize Tax System and Attract Foreign Investors – Commentary

Tax code



The Macau Special Administrative Region (MSAR) government has introduced a series of bills on tax matters to the Legislative Assembly with the aim of creating a uniform approach to the tax concepts and principles of the Macau tax system, as well as to stay up to date with Macau’s economic development and international tax standards.

These bills include amendments to Law No. 5/2017 (Legal Framework on the Exchange of Information for Tax Purposes (LFET)) and the Tax Code, which will serve as the basis for the future tax system. Both bills were presented to the Legislative Assembly in November 2021. While the first has already been enacted by Law No. 1/2022, the second is still under discussion in the Third Standing Committee of the Legislative Assembly.

Macau’s tax system was established in the 1970s and 1980s.


Law No. 1/2022 amended the LFET with the aim of better aligning the MSAR with the international standards established by the Global Forum on Transparency and Exchange of Information for Tax Purposes. These amendments were approved by the Legislative Assembly on January 24, 2022 and came into force on April 1, 2022.

These changes include in particular:

  • add the information held by the management entities of the super-mandatory pension funds and central provident funds for information on request (IUR);
  • the removal of the time limit on information to be provided via an IUR, which was limited to information covered in the year the request was received by MSAR and the previous five fiscal years; and
  • legal consequences for non-compliance with or circumvention of rules relating to automatic exchange of information – for example, the rules set out in the General Reporting Standards and Due Diligence Procedures for Financial Account Information approved by the Director General of MSAR in accordance with the LFET.

These changes also imply making the necessary adjustments following the abolition of the old offshore regime.

Tax code

The Tax Code Bill aims to provide a modern tax system that is consistent with the economic development of the MSAR and international tax standards, as well as to ensure the tax revenue of the MSAR and to protect the legitimate rights and interests of taxpayers. The draft law proposes to unify the provisions of the existing separate tax regulations and sets out the rights and obligations in several aspects:

  • tax legal relationships and their guiding principles;
  • relevant litigation procedures; and
  • enforcement procedures.

The Tax Code bill is divided into five sections, with a total of 293 articles. Currently, it is the subject of extensive discussions in the Third Standing Committee of the Legislative Assembly, in particular concerning:

  • compensatory interest;
  • over-invoicing or erroneous collection of the tax due to facts attributable to the administration;
  • the appointment of tax representatives for taxpayers who reside outside the MSAR or who reside in the MSAR but stay in the MSAR less than 183 days during a calendar year;
  • limitation periods for tax obligations;
  • submission of anonymous complaints;
  • additional tax charges of an amount equivalent to 3% of the unpaid tax, in addition to default interest; and
  • abolition of the procedure for tax enforcement of fines in the event of the death of the tax debtor.

The Third Standing Committee of the Legislative Assembly completed an appreciation round of the draft bill in June 2022.


MSAR is a freeport and has low tax rates for corporation tax, also known as “additional income”, and personal income tax, also known as “business tax”, all of which are two capped at 12%. The RASM budget law provides for allowances or exemptions as tax relief measures. For example, in accordance with the 2022 RASM finance law, exemptions apply to taxable profits made during the 2021 tax year that are less than 600,000 Macanese pataca (approximately $74,200) for the corporate income tax and less than 144,000 Macanese pataca (about $74,800) for personal income tax. .

In addition, the RASM has entered into double taxation agreements with China, Hong Kong and a number of Portuguese-speaking countries.

Strengthening the confidence of the international community and foreign investors in the tax system of the MSAR is a key objective of these modifications, as well as making the business environment of the MSAR more competitive and attractive by offering a modern and better organized tax system. .

For more information on this subject, please contact Calvin Tinlop Chui at Rato, Ling, Lei & Cortés Advogados by phone (+853 2856 2322) or email ([email protected]). The Rato, Ling, Lei & Cortés Advogados website can be accessed at