Papua New Guinea taxes resident companies on income from all sources, including foreign-sourced income, and non-resident companies operating through a permanent establishment on PNG-source income, under the Income Tax Act 2025 administered by the Internal Revenue Commission (IRC). Standard trading profits of resident companies and PE profits of non-residents are taxed at 30%, with non-resident PEs additionally subject to a 15% remittance tax and commercial banks facing rates between 35% and 43% depending on taxable income.
The tax year generally follows the calendar year for most companies, with special rules for mining, petroleum, and gas exploration and production activities administered under ring-fenced project accounting distinct from the general corporate tax regime.
Papua New Guinea's headline corporate income tax (CIT) rate is 30%.
The headline personal income tax (PIT) rate is 42%.
The standard VAT/GST (or equivalent consumption tax) rate is 10% (GST).
An individual becomes a PNG tax resident for the year in which they commence residing in PNG - this includes anyone domiciled in PNG (unless their permanent place of abode is outside PNG), and anyone present in PNG for more than one-half of the income year, unless the Commissioner General is satisfied the person's usual place of abode is outside PNG or they do not intend to take up PNG residence. A company incorporated in PNG is automatically a PNG tax resident. A foreign-incorporated company is also PNG-resident if it is managed and controlled in PNG (key decisions made at directors' meetings held in PNG), or if it trades in PNG and its voting power is controlled by PNG-resident shareholders. Resident companies are taxed on worldwide income; non-residents only on PNG-source income, generally via withholding or a permanent-establishment net-basis charge.
Whether a non-resident is taxed in Papua New Guinea on PNG-source income depends critically on whether it has a permanent establishment under Section 8 of the Income Tax Act 2025: PE profits are taxed at the standard 30% rate plus a 15% remittance tax on repatriated after-tax profits, while non-PE PNG-source income was, until a recent reform, collected through withholding but under current law non-residents operating through a PE are no longer subject to withholding tax on PNG-source income through that separate mechanism. Under PNG's tax treaty with Australia, a construction site exceeding 90 days creates a PE.
Applies to both individual and corporate PNG residents. Under the Income Tax Act 2025 (effective for the current tax year), PNG's CFC regime attributes a proportional share of "property income" (passive income - dividends, interest, royalties, rent, pensions, annuities, and similar) from a qualifying low-tax foreign entity directly to a PNG resident holding 50% or more direct or indirect interest, taxable in PNG as it arises. The low-tax trigger is an effective foreign tax rate below 15%, a territorial/remittance-based foreign system, or a jurisdiction with financial secrecy features that conceal beneficial ownership. Note: older secondary sources (including some 2016-2018 KPMG country profiles) state PNG has no CFC regime - that was accurate under prior law but is now outdated; the current PwC Worldwide Tax Summaries page (last reviewed 27 March 2026) confirms the regime is now in force under ITA 2025.
2:1 debt-to-equity ratio applies to foreign-controlled PNG companies (including PNG permanent establishments of non-residents), calculated monthly as average debt to average equity across the tax year. Where the ratio is exceeded, deductible interest is disallowed proportionally using the formula: disallowed interest = total deductible interest x (excess debt / average debt). Licensed financial institutions are exempt, as are cases where the lender is resident in a non-discrimination-clause treaty country and average debt does not exceed arm's-length debt. Resource (mining/petroleum) companies are subject to a separate, more generous 3:1 ratio.
Papua New Guinea classifies entities under its own domestic Income Tax Act 2025 rather than offering an elective check-the-box system, and no ATAD2-style anti-hybrid mismatch regime addressing double-deduction or deduction-without-inclusion outcomes has been identified. As described elsewhere on this page, PNG's CFC regime (in force under the Income Tax Act 2025, attributing passive property income from qualifying low-tax foreign entities to PNG residents with 50% or more interest) functions as the jurisdiction's primary anti-avoidance backstop against low-taxed offshore structuring.
No domestic FBAR-equivalent regime requires PNG residents to separately disclose foreign financial accounts. Papua New Guinea signed the CRS Multilateral Competent Authority Agreement on November 26, 2024, but its first financial account information exchange is not targeted until September 2027, meaning PNG has committed to CRS but was not yet actively exchanging information as of this page's verification date. US persons remain independently subject to FinCEN Form 114 (FBAR) and potentially Form 8938 regardless of PNG's own rules.
No general participation exemption regime for dividends or capital gains from a qualifying foreign subsidiary was identified in PNG's Income Tax Act 2025; there is no capital gains tax on shares outside the specific new CGT rules applying to interests in mining and oil and gas projects, and dividends paid by way of share issuance wholly from profits arising on the sale or revaluation of assets not acquired for resale are exempt from income tax and dividend withholding tax as a narrow, specific carve-out rather than a general participation exemption.
A foreign tax credit may be available to offset foreign tax paid against PNG tax payable, limited to the lesser of the foreign tax paid or the average PNG tax payable on that foreign income; credits are calculated separately for foreign business income and foreign property income pools (preventing cross-utilization between the two), claimants must provide evidence of foreign tax payment within two years of the end of the relevant tax year, and there is no mechanism to carry forward excess foreign tax credits to a subsequent year.
PNG has 11 confirmed treaty partners - Australia, Canada, China, Fiji, Germany, Indonesia, Korea, Malaysia, New Zealand, Singapore, and the United Kingdom (plus MLI participation). Lower counts from a KPMG-sourced guide (9) and a secondary aggregator (8) likely reflect older data or a narrower definition of what counts as in-force; PwC's named, current list is preferred here as the most specific and verifiable figure. PNG has also concluded a standalone TIEA with Australia in addition to its full DTA.