Tax News Update    Email this document    Print this document  

October 15, 2021

Mainland China releases master plan for developing Guangdong-Macao In-depth Cooperation Zone

Executive summary

To promote the development and opening-up of the Guangdong-Macao In-Depth Cooperation Zone (the Cooperation Zone) in Hengqin and further deepen the implementation of the Outline of the Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, the Central Committee of the Chinese Communist Party and the State Council jointly issued a master plan (the Plan) on 5 September 2021.

Under the Plan, the development and management of the Cooperation Zone will be jointly led by the Governor of the Guangdong province and the Chief Executive of the Macao Special Administration Region. The Cooperation Zone will demonstrate a new integrated high-level opening-up system between Hengqin and Macau. Special measures to further improve market access in the Cooperation Zone are also anticipated.

This Alert summarizes key features outlined in the Plan.

Detailed discussion

New industries

With a focus on the development of new industries that will enable the diversification of Macao’s economy, the Cooperation Zone is intended to be a hub for new industries, including scientific and technological research and development, high-end manufacturing, traditional Chinese medicine, culture, tourism, conventions and exhibitions, trade and modern finance.

Preferential tax policies

  • Enterprises engaged in qualified industries in the Cooperation Zone will be eligible for a reduced Corporate Income Tax (CIT) rate of 15%.1 All industries conducive to Macao’s economic diversification will be included in the scope of the policy. Detailed eligibility guidance and criteria have not yet been released.
  • Enterprises are allowed to claim a one-off deduction, accelerated depreciation or amortization for qualified capital expenditure.
  • Income derived from incremental outbound/foreign direct investment by enterprises established in the Cooperation Zone and engaged in tourism, modern services and high-tech sectors will be exempt from CIT.
  • For domestic and overseas high-end and urgently needed human resources working in the Cooperation Zone, their Individual Income Tax (IIT) burden exceeding the 15% tax rate will be exempt. The China IIT imposed on Macao residents working in Hengqin is not expected to exceed their respective tax burden in Macao.

Special customs policies

  • Special customs policies will apply to goods and commodities entering or exiting the Cooperative Zone, unless otherwise provided.
  • Goods and commodities entering the Cooperative Zone will be regarded as having been exported from Mainland China and the rules regarding the refund of VAT for exports and consumption tax will apply. Where applicable, export duties will be levied.
  • Duty-free and bonded goods and commodities entering Mainland China from the Cooperative Zone will be subject to customs processes and will be subject to duties and import-level taxes in accordance with the relevant regulations.
  • Goods processed by enterprises in the Cooperation Zone without imported materials (or if processed with imported materials, the incremental value created by the processing is at least 30%), will be exempt from customs duty when entering Mainland China.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Tax Services Limited, Hong Kong

Ernst & Young Ernst & Young (China) Advisory Limited

Ernst & Young LLP (United States), China Tax Desk

Ernst & Young LLP (United Kingdom), China Tax Desk, London

Ernst & Young LLP (United States), Asia Pacific Business Group, New York

Ernst & Young LLP (United States), Asia Pacific Business Group, Chicago



  1. The standard Mainland China CIT rate is 25%.