Business Payments Tax & Income Reporting System
In Papua New Guinea (PNG), businesses are subject to both Business Payments Tax (BPT) and an income reporting system.
The Business Payments Tax (BPT) is a tax that is levied on certain types of business payments, such as payments for goods, services, and rent. BPT applies to businesses that have an annual turnover of more than PGK1 million. The BPT rate is currently set at 1.5% for the year of income 2021-2022, it can vary depending on the circumstances of the company.
The Income Reporting System is a system that is used to report and pay income taxes in PNG. Under this system, businesses are required to file an income tax return with the Internal Revenue Commission (IRC) on an annual basis, declaring their income and any deductions or exemptions claimed. The businesses are also required to pay income tax on their profits at the corporate level. The current corporate tax rate for most companies is 27.5% for the year of income 2021 and 2022, it can vary depending on the circumstances of the company.
It’s important for businesses to keep accurate records and comply with their tax obligations, as the IRC may audit the records of a business at any time to ensure compliance. Penalties and fines may apply for businesses that fail to comply with their tax obligations. It’s also important to note that the tax laws and regulations can change frequently, and it is recommended to consult with a tax professional to ensure that the company is in compliance with the current laws and regulations.
