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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Macao Phase 2 Peer Review

This report for Macao, China has been published on 22 Nov 2013. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   It is open to public companies to issue bearer shares. While only a limited number of such shares are known to be in circulation currently, there are insufficient mechanisms in place to ensure the availability of ownership information in all circumstances.  Macao should ensure that robust mechanisms are in place to identify the owners of bearer shares or should abolish bearer shares. 
Phase 2 Rating Factors Recommendations
Partially Compliant.  There is no system of monitoring compliance with commercial filing obligations or imposition of penalties for non-compliance, except in the case of entities that pay distributions out of their pre-tax profits, which are monitored by the tax authorities. Furthermore, compliance with ownership record keeping obligations by private companies is not systematically monitored.  Macao should ensure that all its monitoring and enforcement powers are appropriately exercised in practice to support the legal requirements which ensure the availability of ownership and identity information, in particular for private companies and partnerships. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.   For relevant entities that are not Group A complementary taxpayers, the record keeping requirements do not clearly cover the full range of underlying documentation.  Macao should ensure that comprehensive underlying documentation is kept for all entities for a minimum of 5 years. 
Phase 2 Rating Factors Recommendations
Compliant.     
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Largely Compliant.  The scope of legal professional privilege is interpreted broadly in practice to encompass all information obtained by a lawyer, whether from the client or third parties, in the course of his/her legal profession.   Macao should ensure that the scope of legal professional privilege under the laws of Macao is not interpreted in a manner which could prevent access by Macao’s competent authority to information that is necessary for effective EOI.  
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.   One of Macao’s DTCs contains additional language which restricts the exchange of bank information.  Macao’s authorities should commence negotiations to amend the agreement with Cape Verde to bring it to the standard.  
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.   Macao is in the process of negotiating an EOI agreement with one of its main trading partners.  Macao should establish agreements to the standard with all its relevant partners and bring them into force expeditiously. 
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Largely Compliant.  Macao has committed sufficient resources and put in place sound organisational processes to handle inbound EOI requests in a timely manner. Nevertheless, this system has not been sufficiently tested in practice.  Macao should monitor the practical implementation of the organisational processes for and the level of resources committed to EOI purposes, in particular taking account of any significant changes to the volume of incoming EOI requests, to ensure that both are adequate for effective EOI.