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China, Macau Amend Double Tax Agreement

by Mary Swire, Tax-News.com, Hong Kong

22 July 2016


The third protocol to the double taxation agreement (DTA) between Mainland China and Macau was signed in Beijing on July 19, 2016.

The new DTA protocol includes a reduction from seven percent to five percent in the withholding tax imposed by the Mainland on lease payments by aircraft and ship leasing businesses (which are treated as royalties). This change, it was stated, should raise Macau's competitiveness and attract further foreign investment into the territory.

In addition, the document contains enhancements to information exchange arrangements between the two sides to tackle the avoidance of taxation on dividends, interest, royalties, and capital gains.

Macau's Secretary for Economy and Finance, Leong Vai Tac, indicated that the new arrangement would "guarantee the fairness of the taxation system as applied to residents of Macau and the Mainland, as well as creating a better business environment and enhancing tax transparency in order to tackle tax evasion."

The DTA was first signed in 2003, with subsequent revisions in 2009 and 2011.

TAGS: compliance | tax | business | tax information exchange agreement (TIEA) | double tax agreement (DTA) | tax compliance | royalties | China | Macau | agreements | tax rates | withholding tax | dividends

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