Macau, known as the “Las Vegas of Asia,” is considered a tax haven for its advantageous personal and corporate tax structure. Residents and non-residents benefit from ultra-low taxes levied against professional and business income. Situated on the southern coast of China, Macau is the country's only jurisdiction providing legalized gambling. A Portuguese colony until 1999, Macau maintains its own stable currency, the Macanese pataca (MOP), and retains political autonomy with separate executive, legislative, and judicial powers.
Citizens and foreigners who establish residency in Macau enjoy tax rates that are significantly lower than those levied in other developed Asia-Pacific nations such as Japan. Beneficial tax rates also extend to citizens and foreign nationals who work in the city. Macau’s per capita GDP of $91,376 was among the highest in the world, as of 2013, trailing only Luxembourg, Norway and Qatar. While foreigners usually cannot become citizens, they can gain residency by investing 3 million MOP ($375,000) in the local economy. Foreign earnings are not taxed, but residents are taxed on income earned from Macanese companies. The first 144,000 MOP earned is exempt from personal taxation, after which the top tier is taxed at 12%. Non-resident rates are identical to residents’ rates of taxation, but non-residents are subject to a 5% minimum tax rate. By contrast, the top tax rate in Australia is 45%, with a 2% Medicare assessment for residents.
Property taxes accrue from ownership of all residential, commercial, and industrial properties and are dependent upon assessed value or actual rental income, whichever is higher. Rental income is taxed at 10%, and a 6% rate applies to assessed value. There is no inheritance, gift, or capital gains tax in Macau, but stamp duties between 1.05 and 5.25% are levied against transfers of tangible or intangible property.
Corporations benefit from conducting business on the peninsula, as capital gains and corporate income are taxed at significantly lower rates than in European nations and the United States. The preferential tax treatment attracts numerous businesses, the majority of which are casinos that comprise a large percentage of Macau's GDP.
With respect to corporate taxes, the first 600,000 MOP is tax-exempt. Thereafter, income exceeding the exempt threshold is taxed at a top rate of 12%. Both residents and non-residents are treated equally with regard to corporate taxation. All profit earned is taxed within the Macau special administrative region.
Corporate entities are separated into two groups. Group A companies must adhere to proper accounting measures and maintain capital levels equal to or greater than 1,000,000 MOP. Group B companies are either first-time filers or those entities that do not meet the capital requirements of group A businesses. Group B organizations are taxed on assessed profit measures, while group A entities are levied on certified tax returns submitted to the Macau Finance Bureau.