Papua New Guinea Tax Residency Guide 2026

Overview — Tax Residency in PNG

Tax residency is the foundational concept determining the scope of taxation in PNG. Resident individuals are taxed on their worldwide income; non-residents are taxed only on PNG-source income. Residency is defined under the Income Tax Act. For individuals, the test is primarily based on physical presence (183 days) or having a permanent home in PNG. For companies, residency follows incorporation or place of effective management. The Internal Revenue Commission (IRC) applies these rules and may challenge arrangements designed to artificially avoid residency status.

Individual Residency — 183-Day Rule

An individual is considered a tax resident of PNG if they meet any of the following conditions:

• Physical presence — present in PNG for 183 days or more in any 12-month period
• Permanent home — has a permanent home available in PNG (whether owned or rented)
• Habitual abode — has a habitual place of abode in PNG and is present for any period during the year
• Government service — PNG government employees posted overseas are treated as residents

Day counting includes both partial days and full days. The 183-day test applies to any consecutive 12-month period, not just the calendar year. Expats working in PNG should track their presence carefully.

Corporate Residency

A company is tax resident in PNG if either of the following conditions is met:

• Incorporation — the company is incorporated or registered under the Companies Act in PNG
• Effective management — the place of effective management (POEM) of the company is in PNG

Foreign companies that have their central management and control exercised in PNG may be deemed resident regardless of where they are incorporated. The POEM test considers factors such as the location of board meetings, where senior executives operate, and where strategic decisions are made.

Source Rules — PNG-Source Income

Non-residents are taxed only on income derived from sources in PNG. The Income Tax Act defines specific source rules:

• Employment income — sourced where the employment duties are performed
• Business income — sourced where the business activities are carried out
• Property income — sourced where the property is located
• Dividends — sourced where the paying company is resident
• Interest — sourced where the payer is resident
• Royalties — sourced where the intellectual property is used

Double Tax Treaties (DTTs)

PNG has a limited but important network of double tax treaties. As of 2026, PNG has comprehensive DTTs with:

• Australia — 15% dividend rate, 10% interest, 10% royalties
• New Zealand — 15% dividend rate, 10% interest, 10% royalties
• Singapore — 15% dividend rate, 10% interest, 10% royalties
• United Kingdom — 15% dividend rate, 10% interest, 10% royalties

Treaties generally reduce withholding tax rates on dividends, interest, and royalties paid to residents of treaty countries. To claim treaty benefits, the recipient must provide a Certificate of Tax Residency from their home country and submit a treaty relief application to IRC.

FAQs

If I work remotely for a foreign company while in PNG, am I taxable?

If you are physically present in PNG for 183+ days, you are a tax resident and must declare your worldwide income, including salary from foreign employment. If present for fewer than 183 days, only PNG-source income is taxable.

How do I prove I am not a resident for IRC purposes?

Maintain records of travel dates, visa stamps, employment contracts, rental agreements, and tax returns from your home country. A Certificate of Tax Residency from your home country is strong evidence.

Can I be resident in two countries at once?

Yes, dual residency is possible. The applicable double tax treaty will contain a tie-breaker clause to determine which country has primary taxing rights.

Disclaimer

This guide provides general information about tax residency in Papua New Guinea for the 2026 tax year. Tax laws and treaty provisions 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.