Harmful Tax Practices – 2017 Peer Review Reports on the Exchange of Information on Tax Rulings

Macau (China)

Macau (China) (hereafter “Macau”) has met all aspects of the terms of reference (ToR) for the calendar year 2017 (year in review) that can be met given in the absence of rulings being issued.

Macau cannot legally issue any type of rulings within the scope of the transparency framework.

As no rulings were issued, no exchange of information is required under the transparency framework. No peer input was received in respect of the exchanges of information on rulings received from Macau.

Introduction

816.  This peer review covers Macau’s implementation of the BEPS Action 5 transparency framework for the year 2017. The report has four parts, each relating to a key part of the ToR. Each part is discussed in turn. A summary of recommendations is included at the end of this report.

A. The information gathering process

817.  As no rulings are issued, this section is not assessed.

B. The exchange of information

818.  As no rulings are issued, this section is not assessed.

C. Statistics (ToR IV)

819.  As no rulings are issued, no statistical data can be reported.

D. Matters related to intellectual property regimes (ToR I.4.1.3)

820.  Macau offers a preferential regime, the Macau offshore institution, which also offers benefits to income from intellectual property (“IP regime”). However no transparency requirements under the Action 5 Report (OECD, 2015) were relevant, as follows:

• New entrants benefitting from the grandfathered IP regime: not applicable for the year in review, because Macau is currently in the process of abolishing the Macau offshore institution regime and application of the non-finance offshore license has been suspended since 31 January 2018. Macau reports that there have been no new entrants in the regime after the publication of the 2017 Progress Report (OECD, 2017b) (which occurred on 16 October 2017). Therefore, the enhanced transparency requirements will not apply.

• Third category of IP assets: not applicable to this regime, which in 2017 was in the process of being amended.

• Taxpayers making the use of the option to treat the nexus ratio as a rebuttable presumption: not applicable to this regime, which in 2017 was in the process of being amended..

Summary of recommendations on implementation of the transparency framework

 

Aspect of implementation of the transparency framework that should be improved	Recommendation for improvement
	No recommendations are made.

References

OECD (2017a), BEPS Action 5 on Harmful Tax Practices – Terms of Reference and Methodology for the Conduct of the Peer Reviews of the Action 5 Transparency Framework, OECD/G20 Base Erosion and Profit Shifting Project, OECD, Paris. www.oecd.org/tax/beps/beps-action-5-harmful-tax-practices-peer-review-transparencyframework.pdf.

OECD (2017b), Harmful Tax Practices - 2017 Progress Report on Preferential Regimes: Inclusive Framework on BEPS: Action 5, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264283954-en.

OECD (2015), Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris. https://doi.org/10.1787/9789264241190-en.