Macao SAR government’s investment in the Mainland will be exempt from tax

The Chief Executive of the Macao Special Administrative Region Chui Sai On and the Director of the State Administration of Taxation Wang Jun signed the fourth protocol of the “Arrangements for the Mainland and the Macao Special Administrative Region on Avoiding Double Taxation of Income and Preventing Tax Evasion” in Macau.

 The relevant provisions of the government tax exemption are added to the protocol. After the Protocol enters into force, the income of the SAR Government’s investment in the Mainland will be exempt from taxation. The exemption is applicable to the “Guangdong-Macao Cooperative Development Fund” and similar investment projects in the future.

The spokesman’s office of the Macao SAR Government said that the measures will effectively reduce the tax cost of the provincial government ’s investment in the Mainland and increase its return rate. It will help diversify investment in reserves and promote industrial development, which fully reflects the country ’s policy of moderately diversified development of the Macao SAR economy Care and support.

The Macau Monetary Authority also stated that the state’s preferential tax arrangement reduces the tax cost of the SAR government’s investment in the Mainland, thereby increasing the actual return on the SAR’s fiscal reserve investment. Taking the “Guangdong-Australia Cooperative Development Fund” as an example, if only the 3.5% annual guaranteed income of the Australian side is calculated, it is estimated that the accumulated tax exemption can be nearly 800 million yuan based on the investment amount and duration of the fund.

The Mainland and Macau Special Administrative Region signed the Arrangement on Avoiding Double Taxation of Income and Preventing Tax Evasion in 2003. It has been 16 years. This arrangement allows residents of both sides to enjoy fair tax burdens, optimize the business environment for businesses, and promote the development of bilateral trade and investment activities.