If you want to incorporate in Papua New Guinea, reading this will help you becoming knowlegeable on the specific tax laws and rates for a LLC which is the most common company structure in Papua New Guinea.
Papua New Guinea taxes corporate income earned outside the borders in the same way that earned within the country. The usual tax rate for offshore income, from our research, and these things do change, is 30%. Papua New Guinea may not have major incentives to remit offshore income back. Taxes are high in Papua New Guinea as the highest corporation tax rate is 30%. This ranks Papua New Guinea as 136th overall with regards to corp. taxation rate internationally.
The VAT rate is 10.00%, which ranks Papua New Guinea as 47th when compared to VAT taxation rate internationally. In terms of other taxation, an employer will contribute 8.00% to the equivalent of a social security fund and an employee will contribute 6.00%. The overall complexity of the tax system is low. This is measured by average time to comply with a country's labor tax requirements is as it is 8hours. Contributing to this is the number of yearly labor tax payments, which is 2 in PG.
Thin cap standards are in play. This refers to any sort of requirements on given company with respect todebt-to-asset ratios. Dividends received are included in taxable income and subject to corporate income tax standard rates. A dividend is a payment of earnings of the legal entity, passed by by the board, to a class of its shareholders. Dividends can be one of the following shares of stock, cash payments, or other property. There is no capital gains tax, however certain gains from the sale of property acquired for the purpose of resale, or from the carrying out of a profit-making scheme, are taxable as ordinary income. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.
The interest withholding tax rate is estimated at 15%. This means that the tax authorities expects LLC's to automatically withhold 15% of interests paid to non-residents. The dividends withholding tax rate is 15%. Which means that the taxman expects to automatically withhold 15% of dividends remitted abroad. The royalties withholding tax rate 10%. This means that the tax authorities expects relevant legal entities to automatically withhold 10% of payments abroad on royalties. Withholding tax rates may be reduced under a tax treaty.
There is no known tax on wealth in Papua New Guinea. There are no known inheritance, real property and transfer taxes in Papua New Guinea. There are not many frequently implemented R&D initiatives that provide tax relief here.
The above is not tax or legal advice for your particular circumstances. We are able to refer you to an accountant in Papua New Guinea who will advise you. Ready to get started? Click the free consultation button above or press incorporate now if you are in a hurry.
It takes approximately 153 hours to file and prepare documents for a Papua New Guinea Mixed (Common and Customary law).
The corporate tax is approximately 30% which is 136 in the world.
Owners of a company in Papua New Guinea are not allowed to carry back a loss and may be allowed to carry forward a loss for 20 years.
The vat rate in Papua New Guinea is 10% which ranks 46 in the world.