Understanding corporate income tax and other business taxes in Papua New Guinea is essential for companies operating within the country. Alongside corporate income tax, businesses should be aware of other taxes, such as GST, withholding tax, import duties, employment taxes, and sector-specific taxes for mining and petroleum operations. It is advisable to consult with a tax professional or refer to the official website of the Papua New Guinea Internal Revenue Commission for the most accurate and up-to-date information. By fulfilling their tax obligations, businesses can operate in compliance with Papua New Guinean tax laws and contribute to the growth and development of the country's economy while benefiting from its diverse business opportunities.
Corporate Income Tax:
Papua New Guinea imposes corporate income tax on the profits earned by companies operating within its jurisdiction. The corporate income tax rate in Papua New Guinea is a progressive rate structure with two tiers. As of the knowledge cutoff date in September 2021, the tax rates are as follows:
- Companies with chargeable income up to PGK 500,000: 30%
- Companies with chargeable income above PGK 500,000: 45%
Types of Business Taxes in Papua New Guinea:
- Goods and Services Tax (GST): Papua New Guinea operates a Goods and Services Tax (GST) system. The GST rate in Papua New Guinea is currently set at 10%. GST is applicable to most goods and services, with certain exemptions and zero-rated supplies.
- Withholding Tax: Papua New Guinea imposes withholding tax on certain types of payments made to non-residents, such as dividends, interest, royalties, and fees for technical services. The withholding tax rates vary depending on the nature of the payment and may be subject to tax treaties.
- Import Duties: Import duties are levied on goods imported into Papua New Guinea. The rates vary depending on the type of goods and their classification under the Papua New Guinea Customs Tariff.
- Employment Taxes: Employers in Papua New Guinea are required to deduct and remit employment taxes, including income tax and social security contributions, on behalf of their employees. The rates for these contributions vary based on the employee's salary and specific circumstances.
- Mining and Petroleum Taxes: Companies engaged in the mining and petroleum sectors may be subject to specific taxes, such as mining and petroleum income tax, royalty taxes, and production levies. These taxes are governed by sector-specific legislation.
Papua New Guinea Internal Revenue Commission Website:
For comprehensive and up-to-date information on business taxes in Papua New Guinea, it is recommended to visit the official website of the Papua New Guinea Internal Revenue Commission.
Papua New Guinea Internal Revenue Commission Website: Official Papua New Guinea Internal Revenue Commission Website