Papua New Guinea

Treatment of flow-thru business entities

In Papua New Guinea, individuals may conduct their business through various different structures, including as a sole trader, a partnership, or a trust.

A partnership is required to submit a return of income to the IRC. The net income disclosed in the partnership return is then shared amongst the individual partners for inclusion in their income tax returns. Similarly, losses are also able to be shared amongst partners to offset their individual income.

Trusts that operate a business in Papua New Guinea will be deemed to be resident in Papua New Guinea unless certain criteria are satisfied. The trustee is generally taxed at 42%, other than a deceased estate during the first three years of administration, which is taxed at individual rates.