Papua New Guinea Tax Profile

R&D Incentives Other incentives Hybrid Instruments Hybrid entities Special tax regimes for specific industries or sectors Related business factors As of 1 January 2014 the additional 50 percent deduction does no longer apply to eligible R&D expenditure. The expenditure incurred on scientific research incurred prior to this date is not being affected. The Papua New Guinea Government offers very few tax incentives to attract new international investments into the country. However, certain industries or projects have been granted exemptions or concessions, including: Fishing " Tourism Exports Infrastructure Rural development New primary production projects/ approved extension projects The treatment of debt and equity for tax purposes is the same as per the accounting standards. There are special rules applicable to hybrid entities. Specific tax rules apply to certain industries such as mining, oil and gas and superannuation funds. Forms of legal entities typically used for conducting business A Limited Company is the typical legal entity used in Papua New Guinea for conducting business. It is also common for entities to operate in Papua New Guinea through a branch structure. Capital requirements for establishing a legal entity There is no minimum capital requirement for corporation law purposes in Papua New Guinea. Other local requirements for establishing a legal entity Papua New Guinea companies that are 50 percent or more owned by foreign investors require certification from the Investment Promotion Authority. Some activities are reserved for Papua New Guinea nationals. Foreign exchange control rules 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. KPMG © 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 5

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