Taxation of Companies
In Papua New Guinea, companies are subject to 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.
Companies are also required to pay Goods and Services Tax or GST at a rate of 10% on the value of goods and services they supply. The GST system in PNG is based on the invoice credit method, where companies can claim input tax credits for the GST they have paid on their inputs.
In addition to the above, there are also payroll taxes that companies are required to pay for their employees. The employer must deduct tax from the employee’s salary at the rates specified by the Income Tax Act and remit it to the Internal Revenue Commission.
Companies may be eligible for certain tax exemptions or concessions, such as those for mining companies and companies operating in certain sectors like tourism. It is important to work with professional in accounting and tax to ensure that the company is taking full advantage of any such exemptions or concessions that it may be eligible for.
It’s 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 tax laws and regulations.