Papua New Guinea tax rates at a glance, including corporate tax, withholding taxes, and goods and services tax. Provided by KPMG’s Port Moresby office.
|Corporate income tax rate||30|
|Capital gains tax rate||0|
|Branch/non-resident company tax rate||48|
|Dividend withholding tax||15|
|Interest withholding tax||15|
|Royalty withholding tax||10|
|Foreign contractors tax||15|
|Management fee withholding tax||17|
|Goods and services tax (GST)||10|
Net operating losses (years)
a) In some limited cases, due to the operation of a relevant non-discrimination clause in some of the Double Taxation Agreements (DTA), also commonly referred to as a tax treaty, that PNG has concluded with a partner country, the rate of tax on PNG Branch operations of a non-resident company is reduced to 30%.
b) Dividend withholding tax (DWT) is imposed at 15%.
c) Withholding tax on interest paid to residents of countries with which PNG has entered into a DTA is restricted to 10% in most cases.
d) Royalties paid to all residents of DTA partner countries are taxed at a maximum of 10% on gross income, where such payments are on an ‘arm’s length’ basis.
e) The general domestic rate for taxation of foreign contractors is set at 15%. A previously existing option to lodge income tax returns where taxable income is taxed at 48% of taxable profits, as an alternative to the withholding tax, has been removed.
f) Management fee withholding tax will not apply where the fees are paid to residents of certain DTA partner countries.
g) For superannuation deductions to be available to corporate entities they must be made to an authorised PNG resident fund.
(h) Trustees of both normal trusts and of unit or property trusts are initially taxed at 30% on the net income of the trust. For normal trusts, the beneficiaries then suffer a further tax imposition with the rate depending on whether they are a resident or non-resident.
i) Primary production (agriculture etc) ventures and resource companies have 20 year carry forward of losses.
This guide to Papua New Guinea’s tax system is produced by KPMG’s Papua New Guinea office and is reproduced here with permission.
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