Papua New Guinea legal and accounting and tax considerations in 2023
- The standard resident corporate rate is 30% percent and standard non-resident corporate is 48%.
- A company is considered to be resident in PNG if it is incorporated under PNG Law. Companies incorporated under foreign law are considered to be PNG resident if they are carrying on business in PNG and are effectively managed and controlled in PNG;
- Taxes for companies involved in the mining or exploration of natural resources (oil & gas) have varying tax rates depending on source and date of exploration;
- Dividends are subject to a 17% withholding tax unless the rate is reduced with sovereign tax treaty;
- Annual audited financial statements and corporate tax return is submitted to the PNG Taxation Office. It is occasionally possible to obtain an audit exemption;
- PNG has signed double taxation agreements with 9 countries, including Australia, Canada, Fiji, Germany, China, Singapore, Malaysia, South Korea, and Indonesia;
- Tax clearance is required for remittances exceeding K200,000 in a calendar year other than remittances that are trade related involving the physical movement of goods. The remittance of any funds to a specific number of countries does require a tax clearance certificate. Following liberalization of exchange control rules, the Bank of Papua New Guinea has delegated foreign exchange approval for most transactions to the commercial banks;
- The standard rate of GST is 10%. Certain goods and services are exempt or zero-rated;
- Annually, medium sized business pay corporate income tax, health insurance contributions, social security contributions, tax on interest, property tax, stamp duty, and also value added tax;
- It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.
Legal and compliance
Healy Consultants Compliance Department guides our Client through legal and tax obligations.
- The minimum amount of paid up capital to be invested in a foreign-owned company is US$1. There must be at least one shareholder and one director;
- The company directors are appointed, replaced and dismissed by the shareholders. Within 30 days, shareholders should notify the Ministry Of Labor And Human Resources of any changes to the company structure. The identities of shareholders and directors are on the public register;
- Every company must lodge an annual return in which a director or secretary of the company confirms relevant details of the company for the public register including names and addresses of all directors, address of principal place of business and details of shareholders and their shareholdings;
- PNG has Free Trade Agreements with Australia, Melanesian Spearhead Group(MSG), South Pacific Regional Trade and Economic Cooperation Agreement members and the European Union.
- Companies in Port Moresby must obtain a trading license from the National Capital District Commission.