Gov’t to supervise transfers by multinational luxury brands to ensure tax compliance

The Executive Council (ExCo) has concluded discussions on a new administrative regulation aimed at setting standards for the transfer pricing of branches of multinational companies established in Macau.

In a press conference held Wednesday at government headquarters, the Secretary for Administration and Justice and ExCo spokesperson, André Cheong, said that the new regulation aims to “prevent and deter the misuse of transfer pricing by multinational companies to circumvent their tax responsibilities, and to implement the transfer pricing rules contained in the 2024 amendments to the Supplementary Income Tax Regulation.”

Cheong also added that the regulation aims to “protect the tax base of the Macau SAR and, at the same time, fulfill its international obligations as a member of the inclusive framework on Base Erosion and Profit Shifting, aligning Macau’s tax system with international standards and enhancing the transparency and fairness of the tax system.”

When the media asked what companies are primarily involved in this kind of transaction, the acting deputy director of the Financial Services Bureau, Kuok Iat Hoi, said, “It is going to target multinational enterprises as they conduct transfers in large amounts.”

According to Kuok, multinational companies in Macau have been conducting their local operations following international transfer pricing practices for many years, with their revenues reported in accordance with relevant standards.

Despite the enforcement of the new regulation, the DSF official said he does not have a clear idea of the number of companies involved in this process that will be targeted by the new rules or the amounts involved

“We believe that high-end retail companies have been doing this for years. The transfer pricing regulation has existed for years in many countries. So when this kind of tax policy has been implemented in the rest of the world, and many of these high-end or luxury retail outlets also have their parent companies in other parts of the world, it is necessary for Macau to implement this particular regulation because we need to be in line with international standards, especially regarding transfer pricing,” said Kuok.

Admitting that no impacts are likely to come from the measure in terms of taxation for Macau, Kuok said, “It is not going to create a significant impact on our tax base. Instead, we are just trying to align ourselves with international regulations for transfer pricing.”

This regulation takes effect on January 1, 2026.