Papua New Guinea Tax Profile

4 Personal Taxation Income Tax Income tax Top Rate Salary or Wages Tax Social Security Further information The top personal tax rate for residents and non-residents is 42 percent and applies to taxable income in excess of PGK 250,000. However, the thresholds for progressive tax rates differ between residents and non-residents. A Salary or Wages Tax applies to income earned as salaries or wages being defined in the Income Tax Act 1959. The definition of salary or wages is very wide and includes commissions, bonus, remuneration of any kind or allowances paid in respect of or in relation to the employment of a person but also any remuneration by way of fees or otherwise for professional services or services as an advisor, consultant or manager where such remuneration is paid wholly or substantially for personal services rendered by that person in PNG. It also includes the remuneration of a director of a company by that company. Salary or wages tax is calculated for each fortnight and is to be remitted to the IRC before the 8th day of the following month. There is no social security tax in Papua New Guinea. However, all employers with 15 or more employees (either citizens or expatriates) are required to register with an Authorised Superannuation Fund (ASF) in Papua New Guinea. Contributions are 6 percent for the employee and 8.4 percent for the employer of the gross base salary. Employees who are Papua New Guinea citizens must become members of an ASF as soon as they have been continuously employed for three months or more. Contributions by non-citizen employees are voluntary at the moment, and implementation of provisions that require contributions by non-citizen employees have been deferred pending resolution of related technical issues. Link to KPMG's Thinking Beyond Borders 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. 8

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