The salaries of all work performed in PNG are normally taxable in PNG. Unless the person is eligible for discharge under the personal service section under an applicable double taxation agreement, the number of days provided in PNG is irrelevant. PNG has entered into double taxation agreements to avoid double taxation and to allow cooperation between PNG and foreign tax authorities to enforce their respective tax laws. In double taxation agreements, there are reliefs that, under certain conditions, would not be subject to the PNG payroll and wage tax for residents of other countries/jurisdictions. There is potential for a stable establishment as a result of extensive business travel, but this would depend on the nature of the services provided and whether or not the worker`s country or jurisdiction has entered into a double taxation agreement with PNG. Taxable net income is taxed at rates of up to 42 per cent on incomes above 250,000 Papua New Guinea (PGK) kines. Non-resident tax rates are the same as for residents, except that non-residents do not benefit from the tax-exempt threshold for income up to PGK 12,500. Tax returns are payable until February 28 after the end of the fiscal year on December 31. If a tax agent is used, there is an automatic extension. Tax returns must be filed by non-residents receiving income from PNG sources (along with other income from salary or salary as PNG and dividends or PNG interest subject to final withholding tax).
Longer business travellers are likely to be taxed on work income related to work done in PNG. Residents are taxed on global income, while non-residents are generally taxed only on income from PNG sources. The Goods and Services Tax (GST) is applied at 10% on taxable deliveries of most goods and services. GST registration is required when annual turnover exceeds 250,000 PGK. Most DTTs also contain an information exchange clause; However, the effect of these clauses is limited to the taxes in the DTT. The PNG government has concluded nine bilateral tax treaties, known as Double Tax Agreements or DBAs. They generally assign tax duties to certain types of income from residents of the two contracting countries. These DBAs apply to income and similar taxes, such as payroll and wage taxes, but not to GST. PNG has a DBA with each of the following countries: Superannuation is a mechanism that forces individuals to save money for retirement.
It is mandatory for employers to contribute a minimum contribution of 8.4 per cent of the worker`s salary (limited to 15 per cent of salary) to an authorized superannuation fund. The minimum contribution of workers is 6 per cent of their salary. Superannuation contributions are not mandatory for expatriates. 4 The tax authorities of some Australian contractors have agreed to write summary texts to help the public better understand the impact of MLI. The Australian Tax Office is responsible for drafting summary texts on behalf of Australia. The sole purpose of a synthesized IU text and a bilateral tax treaty is to facilitate an understanding of the application of the IML to the bilateral tax treaty. A synthesized text is not a legal source. The authentic legal texts of the bilateral tax treaty and the MLI prevail and remain the applicable legal texts. Income from work is generally considered Png-related compensation when the person provides the services while physically in PNG. Effects on transfer pricing could occur to the extent that the worker is paid by a company located in one region, but services are provided to the company in another country, i.e.
a cross-border benefit is granted. It will also depend on the nature and complexity of the services provided.