After the establishment of the Macau Special Administrative Region (SAR) in 1999, much debate arose in Macau's courts, particularly regarding the statute of limitations for tax claims and the subsidiary liability of administrators for corporate tax debts. This debate focused on whether the provisions of the 1950 Tax Enforcement Code remained temporarily in force within Macau SAR’s legal framework or if were repealed under the Basic Law, as no Tax Code or General Tax Law has been approved in Macau since its establishment.

The current tax regime, essentially created in the 70s, underwent a comprehensive and long reform initiated in 2011 and resumed in 2021 with a government bill subject to successive amendments, opinions and extensions in the Legislative Assembly. This process culminated in December 2024 with the approval of the new Tax Code (Law 24/2024), set to come fully into force in January 2026.

The need to consolidate several miscellaneous tax laws and regulations and to systematize a clear set of general tax rules, were the main drivers and foundation of this legislative initiative. Lawmakers sought to establish a modern tax regime aimed at, on one hand, accommodating the profound Macau’s economic development in recent decades and, on the other hand, aligning it with international tax standards. By pursuing this update, the Macau Government further expects to bolster international community and investor confidence while considering Macau’s low tax burden.

In part, the new Code integrates the existing scattered fiscal legislation (approximately 29 legal texts), reformulating and updating some of these laws, including the Regulation on Industrial Contribution, the Professional Tax Regulation, the Urban Property Tax Law and the Complementary Income Tax Law.

Furthermore, a new framework was established for the fiscal legal order, providing general provisions and principles for the tax system, defining matters related to the tax legal relationship, stipulating the rights and obligations within tax legal relationships, judicial and procedural tax proceedings as well as the principles and the procedures to implement tax enforcement proceedings.

Ultimately, these measures aim to ensure Macau SAR's fiscal revenues, whilst safeguarding taxpayers' legitimate rights and interests.

During the legislative process, it was established that the Code would cover only taxes and no other levies, such as administrative fees. However, the provisions concerning tax enforcement apply to all debts outlined in Article 174 of the statute (including taxes, other levies, fines, refunds, and other debts owed to Macau SAR or other public entities subject to enforced collection through tax enforcement proceedings).

The Tax Code introduced significant changes, in particular the clarification of the principle of territoriality in fiscal matters and the introduction of key provisions related to taxpayers’ tax domicile (all taxpayers are required to communicate or update their tax domicile before the tax authorities within one year after the entry into force of the Tax Code), the designation of a tax representative, and the status of tax residency in the context of international taxation (an individual residing at least 183 days per year in Macau SAR or having habitual residence there; for legal entities, tax residency is recognized for those with their headquarters or effective management in Macau SAR). It also sets a maximum statute of limitations of 15 years for tax claims. Furthermore, the statute includes two innovative provisions: the use of an electronic tax platform and the due uniform payment of indemnity interest to taxpayers for all taxes and contributions.

Nevertheless, the new statute does not include a comprehensive framework for tax incentives, maintaining the current legislative dispersion, nor does it specifically regulates matters related to administrative tax infractions, which are expected to be addressed in future legislative initiatives. As a result, we can expect some further tax related regulations to be approved in the near future.

 

RIQUITO ADVOGADOS

Contacts of the Firm & Authors

                                                          

João Nuno Riquito                                                            Hália Cerqueira

Managing Partner, Riquito Advogados                             Senior Associate, Riquito Advogados

E: jnr@riquito.com                                                              E: hc@riquito.com 

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