Papua New Guinea Corporate Tax Guide 2026

Overview — Corporate Tax in PNG

Corporate tax in PNG is governed by the Income Tax Act and administered by the Internal Revenue Commission (IRC). A company is tax resident if it is incorporated under PNG law or if its place of effective management is in PNG. Resident companies are taxed on worldwide income; non-resident companies with a permanent establishment are taxed on PNG-source income only. Companies must register for tax with IRC and obtain a Taxpayer Identification Number (TIN). The tax year aligns with the calendar year. Annual returns are due by 31 October following the end of the tax year.

Standard Corporate Tax Rate — 30%

The standard CIT rate for resident companies in PNG is 30% of chargeable profits. Non-resident companies with a permanent establishment in PNG are also taxed at 30% on PNG-source income. Taxable profit is computed as gross revenue less allowable deductions including operating expenses, capital allowances (depreciation), interest costs, and losses carried forward. Losses may be carried forward for up to 7 years. Capital gains are generally not taxed separately in PNG except for mining assets.

Reduced Rate — Mining & Petroleum — 20%

Companies engaged in mining and petroleum operations benefit from a reduced CIT rate of 20%. This concessional rate reflects the capital-intensive nature and additional fiscal regimes applicable to these sectors, including mineral royalties and production levies. The mining and petroleum sectors are governed by the Mining Act and the Oil and Gas Act respectively. Additional taxes such as the additional profits tax may apply to highly profitable projects.

Reduced Rate — Agriculture & Tourism — 10%

Companies engaged in agriculture (crops, livestock, forestry, fishing) and tourism benefit from a concessional CIT rate of 10%. This incentive is designed to promote economic diversification and rural development. To qualify, the company must derive at least 50% of its gross income from qualifying agricultural or tourism activities. Agricultural companies may also benefit from additional capital allowance incentives and tax holidays in certain circumstances under the Investment Promotion Act.

Branches of Foreign Companies

Foreign companies operating through a branch in PNG are taxed at 30% on PNG-source profits, the same rate as resident companies. Branch profits remitted to the head office do not attract additional withholding tax in PNG. Foreign companies should consider the implications of double tax treaties with their home country. PNG has DTTs with Australia, New Zealand, Singapore, and the UK.

Capital Allowances (Depreciation)

PNG uses a capital allowance system for tax purposes. Rates vary by asset category:

• Plant & machinery — 10–20% per annum (declining balance)
• Buildings — 5% per annum (straight-line)
• Motor vehicles — 20% per annum (declining balance)
• Computers & office equipment — 30% per annum (declining balance)
• Agricultural assets — 20–50% per annum (first-year allowances available)
• Mining assets — special rates under the Mining Act

FAQs

What is the penalty for late filing of corporate tax returns?

Late filing attracts a penalty of PGK 500 plus interest per month on the unpaid tax. Additional penalties may apply for failure to maintain proper records or for tax evasion.

Can foreign companies claim treaty relief?

Yes, PNG has double tax treaties with Australia, New Zealand, Singapore, and the UK. Treaty relief may reduce withholding tax rates on dividends, interest, and royalties paid to residents of treaty countries.

Is there a minimum tax for loss-making companies?

PNG does not have a turnover-based minimum tax. Loss-making companies may carry forward losses for up to 7 years against future profits.

Disclaimer

This guide provides general information about Papua New Guinea corporate tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified PNG tax advisor or the Internal Revenue Commission for advice specific to your situation. InvestmentKit does not provide tax advice.