Papua New Guinea Tax Profile

International Withholding Tax Rates KPMG Dividends - Dividends paid to non-residents are subject to withholding tax at 17 percent. Withholding tax is reduced to 10 percent in the case of mining income. Dividends paid out of oil or gas income are exempt from dividend withholding tax. Under application of a tax treaty the rate may be reduced to 15 percent. Royalties - Royalties paid to a non-resident are subject to withholding tax at 10 percent or 30 percent if paid to an associate. Under application of a tax treaty the rate may be reduced to 10 percent. Interest - Interest payments to non-residents are subject to withholding tax at 15 percent. Under application of a tax treaty the rate may be reduced to 10 percent. Certain non-compliant entities - Businesses that make eligible business payments must withhold and remit 10 percent of all such payments to persons or organizations that do not hold a valid "Certificate of Compliance". This tax is applicable to payees in specific industries, including building and construction, road transport, motor vehicle repairs and maintenance and security services. Non-resident contractors - Non-residents contractors involved in certain contracts have the option of being taxed on their contract income at a deemed taxable income equal to 25 percent of the gross contract proceeds, or the actual taxable income from the respective contract. Unless the Commissioner-General of Internal Revenue has approved a foreign contractor to be assessed on the actual taxable income from the contract, the payments to the foreign contractor are subject to a 12 percent withholding tax which is a final tax. Non-resident insurers - Non-resident insurers who do not have a permanent establishment in Papua New Guinea are taxed at 48 percent on 10 percent of gross premiums earned from insuring property or events in Papua New Guinea. Non-resident insurers who are unincorporated associations are taxed at 30 percent on 10 percent of gross premiums earned from insuring property or events in Papua New Guinea. Under application of a tax treaty the income tax rate might be limited. Management fees - Management fees paid to non-residents are subject to 17 percent withholding tax. Under application of a tax treaty the rate may be reduced to nil. Non-resident ship owners or charterers - The taxable income of a non-resident ship owner or charterer is calculated as 5 percent of the gross fares or freight for passengers or goods loaded at a Papua New Guinea port. The tax rate is the non-resident corporate rate of 48 percent, or the progressive individual rates, where appropriate. The master of the ship and the agent are both liable for tax. Payment is usually made to customs officials when clearing the ship's departure. © 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. 2

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