MacauStudiesinManagementSeriesNo.7DIRECTTAXATIONINMACAUCarlosNoronhaMACAUFOUNDATION

MACAUSTUDIESINMANAGEMENTSERIESN0.7BYTHEFACULTYOFBUSINESSADMINISTRATIONUNIVERSITYOFMACAUDIRECTTAXATIONINMACAUCarlosNoronhaFacultyofBusinessAdministration,UniversityofMacauPUBLISHEDBYMACAUFOUNDATION

TitleAuthorSeriesSeriesEditorPublishedbyDirectTaxationinMacauCarlosNoronhaMacauStudiesinManagementNo.7NelsonJosedosSantosAntonioMacauFoundation(Apartado3025,Macau)October,1996ImportantDisclaimer:Nopersonshouldrelyonthecontentsofthispublicationwithoutobtainingadvicefromaqualifiedprofessionalperson.Thispublicationissoldonthetermsandunderstandingthat(I)theauthor,theeditorandthepublisherarenotresponsiblefortheresultsofanyactionstakenonthebasisofinformationinthispublication,norforanyerrorinoromissionfromthispublication;and(2)thepublisherisnotengagedinrenderinglegal,accounting,professionalorotheradviceorservices.Thepublisher,theauthorandtheeditor,expresslydisclaimallandanyliabilityandresponsibilitytoanyperson,whetherapurchaserorreaderofthispublicationornot,inrespectofanything,andoftheconsequencesofanything,doneoromittedtobedonebysuchpersoninreliance,whetherwhollyorpartially,uponthewholeoranypartofthecontentsofthispublication.Thecopyrightofthispublicationisownedbytheauthor.Allrightsreserved.Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmitted,inanyformorbyanymeans,electronic,mechanical,photocopying,recordingorotherwise,withoutthepriorwrittenpermissionoftheauthor.PrintedbyDistributedbyPriceTipografiaWelfareLda.CulturalPlazaMacauLtd.MOP$80ISBN972-658-007-2

DirectTaxationinMacauCarlosNoronha

PrefaceThepresentbookisacompleterevisionofmyearlierpublication'MacauTaxandEconomy'in1991(co-authoredwithBaldwinY.B.Hui).AllthetaxregulationsofthefourmajordirecttaxesinMacauhavebeenupdatedandmostofthemre-writtenforeasierunderstanding.AsthebookisintendedmainlyforstudentspursuinganaccountingdegreeintheTerritory,anumberofdiscussionquestionsandcomputationalexerciseshavebeenaddedfortheirrevisionpurpose.ItisalsohopedthatpotentialinvestorswhoarenotcomfortablewiththecurrenttaxregulationsinPortugueseandChinesemayalsofindthebookcomprehensiveanduseful.However,seriousinvestorsoranyotherinterestedpartyshouldalwaysconsulttheoriginalPortugueseandChineseversionsastheauthorandthepublisherwillnotberesponsibleforanylossarisingoutofmisinterpretationoftheregulationscontained111thispublication.Nevertheless,Ihopethepresentpublicationwillserveitspurposes,namelyasameansforformaltaxaccountingtrainingintheTerritoryandforpromotingtheabundantopportunitiesavailablehereinMacautoinvestorsworldwide.AppreciationisduetoDr.AntonioRodrigues,presidentoftheMacauFoundation,whohasprovidedtheopportunityforlocalacademicsandresearcherstopublishintheEnglishlanguagethroughthe'MacauStudiesinManagementSeries'.Appreciation1salsoduetotheAssociationofCostandExecutiveAccountants111Macauwhichhassupportedthispublicationfinancially.ThanksalsotoProfessorNelsonAntonio,deanofFacultyofBusinessAdministrationoftheUniversityof

DirectTaxationinMacauMacau,whoseconstantsupporttomyvariousendeavorsintheUniversityhasmadethempossible.SpecialthankstoTiffanyLam,oneofmybeststudentsIhaveeverhad,whohasdevotedmanytedioushoursofhertimeinproducingthisbook.Abig'thankyou'toFlorence,whohasbeenonmysideforalltheyears.Finally,IdedicatethisbooktoProfessorLarryArmstrong,myteacherofaccountingandeditorofthe1991publicationwhopassedawayearlierinAprilthisyear.Ishallneverforgetthoseadventuroushourswespentinclassattemptingtosolveproblemsafterproblemsinadvancedfinancialaccounting.CarlosNoronhaMacau,September,1996II

Preface..PartOneCONTENTSOverviewoftheMacauTaxSystem............Directtaxes..Indirecttaxes..Generalcharacteristicsoftaxablerevenues........DoubletaxationreliefTaxreforms..Pa11TwoRegulationofIndustrialTaxChapterI-Incidence,ratesandexemptions..ChapterII-Imposition,calculationandcollection..Chapter111-Inspection.ChapterIV-Penalties..Pages.•..••••I..3.......4...............7...................8.......8.......8.15.......18.28......3IChapterV-Guaranteestothetaxpayers..ChapterVI-Finaldispositions......................33Specialtableofactivities(PlanII)Questions..RegulationofProfessionalTax....36....39............41ChapterI-Incidence,ratesandexemptions..........................43ChapterII-Determinationoftaxablerevenues..................48Chapter111-RegisterofProfessionalTax...ChapterIV-Calculation..ChapterV-Collection......57.59.65

ChapterVI-Inspection..ChapterVII-Penalties..ChapterVIII-Reclamationandrecourses...................68.71.7681ChapterIX-Finaldispositions.................TableofLiberalandTechnicalProfessions..Questions..Exercises..RegulationofComplementaryTax......84...............87................88ChapterI-Incidence,ratesandexemptions.......................95ChapterII-Determinationoftaxableprofits.....IOIRequirementsonaccountingrecordsanddocuments................I08Regulationofdepreciationandamortizationonfixedassets..ChapterIII-Imposition,calculationandcollection..ChapterIV-Inspection....................ChapterV-Penalties..ChapterYI-Reclamationandrecourses..ChapterVII-Finaldispositions...............Complementarytaxratetable.......Questions..Exercises..RegulationofUrbanPropertyTax113129134136.141.144.146..............148..............149ChapterI-Incidence,ratesandexemptions.........................161ChapterII-Determinationoftaxablerevenue.......................166ChapterIII-Housingregister.......................................184ChapterIV-Calculation.........................................193ChapterV-Collection.......197

ChapterVI-Inspection...............................................199ChapterVII-Penalties.....201ChapterVIII-Reclamationandrecourses...........................206ChapterIX-Finaldispositions..............................210...213...214Questions.Exercises..AppendixI-Statisticsontaxation......................AppendixII-Glossary..References..Index..................219...225................237...241

ReferencesIndustrialTax:LeiNo.15/77/Mde31deDezembroLeiNo.17/78/Mde12deAgostoLeiNo.6/85/Mde28deDezembroLeiNo.1/89/Mde17deAbrilDecreto-LeiNo.53/82/Mde25deDezembroDecreto-LeiNo.12/85/Mde2deMarc;:oDecreto-LeiNo.16/85/Mde2deMarc;:oDecreto-LeiNo.37/85/Mde11deMaioDecreto-LeiNo.57/87/MdeJulhoDecreto-LeiNo.72/87/Mde21deDezembroCircularNo.7/DCI/87CircularNo.3/DCl/89ProfessionalTax:LeiNo.2/78/Mde25deFevereiroLeiNo.6/87/Mde20deJulhoLeiNo.55/87/Mde20deJulhoLeiNo.4/90/Mde4deJunhoLeiNo.9/93/Mde23deAgostoDecreto-LeiNo.10/80/Mde17deMaioDecreto-LeiNo.12/84/Mde10deMarc;:oDecreto-LeiNo.75/84/Mde14deJulho

DirectTaxationinMacauDecreto-LeiNo.14/85/Mde2deMar90Decreto-LeiNo.37/85/Mde12deMaioDecreto-LeiNo.18/87/Mde6deAbrilDecreto-LeiNo.3/96/MDespachoNo.40/GM/92ComplementaryTax:LeiNo.2l/78/Mde9deSetembroLeiNo.6/85/Mde28deDezembroLeiNo.6/83/Mde2deJulhoLeiNo.4/90/Mde4deJunhoDecreto-LeiNo.31/83/Mde25deJunhoDecreto-LeiNo.16/84/Mde24deMar90Decreto-LeiNo.16/85/Mde2deMar90Decreto-LeiNo.57/87/Mde27deJulhoDecreto-LeiNo.36/84/Mde28deAbrilDecreto-LeiNo.37/84/Mde28deAbrilDecreto-LeiNo.15/85/Mde2deMar90Decreto-LeiNo.37/85/Mde11deMaioDespachoNo.12/80de8deMar90DespachoNo.209/84de20deAgostoUrbanPropertyTax:LeiNo.19/78/Mde12deAgosto238

LeiNo.2/87/Mde9deMan;:oLeiNo.13/88/Mde20deJunhoDecreto-LeiNo.15/84/Mde24deMan;:oDecreto-LeiNo.38/85/Mde11deMaioDecreto-LeiNo.112/85/Mde21deDezembroDecreto-LeiNo.19/87/Mde13deAbrilDecreto-LeiNo.48/88/Mde20deJunhoOtherReferences:ReferencesCCHTaxEditors(1992,1993,1994,1995),HongKongMasterTaxGuide1st,2"d,3rdand4'"editions.HongKong:CCHAsiaLimited.Chan,SamuelandDanielCheung(1993,1994),HongKongTaxationSd7'3rdd4'"d··tuy1extane1t1ons.HongKong:AsiaPublishersServices.Direc9aodosServi9osdeFinan9as(1996),LinhasdeAq:aoGovernativaPianodelnvestimento1996.Macau:lmprensaOficialdeMacau.ORTInternational(1990),TaxationinAsiaandtheSouthwestPacific.NewYork:ORTInternational.Flux,David(1988,1989,1990),HongKongTaxation.lawand239

DirectTaxationinMacauPractice88-89,89-90,90-91editions.HongKong:ChineseUniversityPress.Noronha,CarlosandBaldwinY.B.Hui(1991),MacauTaxandEconomy.Macau:Direcc;:aodosServic;:osdeFinanc;:asandMacauManagementAssociation.Wong,Fergus(1990),HongKongTaxation.Singapore:McGraw-Hill.240

MACAUSTUDIESINMANAGEMENTSERIESEditedbyNelsonJosedosSantosAntonioQUALITYMANAGEMENT:100QUESTIONSANDANSWERSQualityResearchGroup,FacultyofBusinessAdministration,UniversityofMacauISBN972-8147-71-6164pagespaper1995QUALITY:THEORYANDPRACTICENelsonJosedosSantosAntonio,FacultyofBusinessAdministration,UniversityofMacauISBN972-8147-61-9100pagespaper1995CONSUMERVALUESANDMARKETSEGMENTATIONINCHINA:ISSUESANDIMPERATIVESFORMARKETINGMANAGERS-ANEXPLORATORYSTUDYLeonardoAnthonyNajarroDioko,FacultyofBusinessAdministration,UniversityofMacauISBN972-8147-53-8187pagespaper1995THEDYNAMICIMPACTOFCULTUREONORGANIZATIONSTadashiUmezawa,DepartmentofBusinessAdministration,TokyoKeizaiUniversitySiewHuatKongandCarlosNoronha,FacultyofBusinessAdministration,UniversityofMacauISBN972-8147-76-7152pagespaper1996QUALITYMANAGEMENTANDCHINESECOMPANIESINMACAUAntonioTeixeira,FacultyofBusinessAdministration,UniversityofMacauISBN972-8147-52-X173pagespaper1996MACAU1960s~1990s:TECHNOLOGYUPGRADINGINATOYMANUFACTURER-ADYNAMICANDINTERACTIVESYSTEMOFSTRATEGICMANAGEMENTJorgeR.S.BastoISBN972-8147-84-8170pagespaper1996Forfurtherinformation,pleasecontact:MacauFoundationP.O.Box3052MacauTel:(853)966777Fax:(853)968658

DirectTaxatiollinMacauaimsatprovidinganup-to-datecomprehensivecoverageofthefourmaindirecttaxesinMacau(IndustrialTax,ProfessionalTax,UrbanPropertyTaxandComplementaryTax)intheEnglishlanguage.DirectTaxatiollillMacauiswrittenmainlyforstudentspursuingadegreeinaccountingintheTerritory.TheyshouldfindthepublicationcompleteandconvenientespeciallywiththediscussionquestionsandcomputationalexercisesattheendofeachchapteraswellastheglossaryoftaxtermsinEnglish,PortugueseandChinese.DirectTaxationillMacauservesalsoasausefulguideforpotentialforeigninvestorswhoareinterestedinunderstandingthelocaltaxenvironmentandtaxincentivesprovidedbythelocaladministration.ThepublicationofDirectTaxationillMacauispa1lysponsoredbytheAssociationofCostandExecutiveAccountantsinMacau.CarlosNoronhaislecturerofaccountingandmanagementattheFacultyofBusinessAdministration,UniversityofMacau.ISBN972-658-007-2