Papua New Guinea Tax Profile
Holding rules
Tax Losses
Tax Consolidation / Group
relief
Dividends received by resident individuals from Papua New Guinea companies and dividends received by non-resident
individuals are subject to dividend withholding tax which is a final tax. Dividends received by a company in Papua New
Guinea are taxable but the resident company is entitled to a rebate. The rebate is calculated at the average rate of tax
payable by the company of the amount of dividends received minus allowable deductions that directly relate to income
from dividends.
Foreign dividend income received by a resident individual is fully taxable at marginal tax rates but a credit may be granted
for any foreign tax paid.
There is no capital gains tax regime in Papua New Guinea. Note that the introduction of a capital gains tax is currently
being considered by the Tax review committee that is to report its findings in 2015.
Tax losses may be carried forward for 20 years (unlimited for primary production losses). Continuity of ownership (50
percent or more) of the company and holding company is required to carry forward losses, otherwise the same business
test must be satisfied.
Expenses incurred in deriving foreign income are only deductible against that income. Where a company has incurred a
loss as a result of its foreign activities, such a loss is available for deduction over the next 20 years against foreign
sourced income.
Carrying back tax losses is not allowed.
There is no tax consolidation regime in Papua New Guinea and losses are not permitted to be offset between group
companies.
The transfer of shares will generally be taxed (stamp duty) at 1 percent of the value of the shares transferred.
Transfer of shares
Transfer of assets
The transfer of land and buildings will be taxed at between 2 percent to 5 percent (stamp duty).
CFC rules
KPMG
There is no CFC regime in Papua New Guinea.
© 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.
3View entire presentation