Papua New Guinea

Corporate - Withholding taxes

Last reviewed - 17 December 2019

Dividends, interest, royalties, and technical/management fees

The following WHT rates apply to dividends, interest, royalties, and technical fees under PNG domestic law and tax treaties. PNG domestic legislation provides an exemption from WHT for dividends and interest in certain circumstances. The higher rates quoted are the maximum rates allowable under the treaties.

Recipient WHT (%)
Dividends Interest (1) Royalties Technical fees
Resident company 0 15 0 0
Resident individual 15 15 0 0
Non-resident corporations and individuals 15 15 10/30 (2) 17
Treaty:        
Australia 15 10 10 0
Canada 15 10 10 0
China 15 10 10 0
Fiji 15 10 15 15
Germany (3) 15 10 10 10
Indonesia 15 10 10 10
Korea, Republic of 15 10 10 0
Malaysia 15 15 10 10
New Zealand 15 10 10 0
Singapore 15 10 10 0
United Kingdom 15 10 10 10

Notes

  1. There is no WHT on interest when:
    • interest is paid or credited to a licensed financial institution in Papua New Guinea, the Bank of Papua New Guinea, or the state, or
    • the interest income is otherwise exempt income in the hands of the recipient.
  2. A royalty paid to a non-resident associate of the payee will suffer a 30% WHT. Where the non-resident is not an associate of the payee, the WHT rate will be 10% (or 48% of the taxable income derived from the royalty if the non-resident chooses to lodge an income tax return in Papua New Guinea).
  3. The treaty with Germany has not yet been ratified by Germany.

Business income WHT

Income derived by local contractors in certain industries is covered by the business income WHT regime. The industries affected include:

  • Building and construction.
  • Road transport.
  • Motor vehicle repairs.
  • Security.
  • Equipment hire.

Businesses affected are required to have a certificate of compliance and to produce it when entering into contracts with their customers. Payers are required to file an annual income reporting statement where they make either an eligible payment of PGK 500 or more in relation to one contract or eligible payments for several contracts exceeding PGK 5,000 in the year of income in relation to a single payee. Payers are required to deduct a 10% WHT if payees do not produce a certificate of compliance.

Non-resident insurer WHT

Premiums paid to non-resident insurers in respect of insurance contracts on property situated in Papua New Guinea or insured events that can only occur in Papua New Guinea are subject to tax in Papua New Guinea. The tax is calculated on a deemed taxable income equal to 10% of the gross premium, which is taxed at the non-resident tax rates of 48% (companies) or 30% (unincorporated associations). Tax treaties may limit the rate of tax applied.