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. 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. Browse articles, set up your interests or learn more. A work permit and visa must be required before the person enters work. Non-deductible expenses incurred by an employer for pensioned employers include employer contributions to a non-PNG pension fund. 2 The multilateral instrument is legally applicable under the International Tax Agreements Act of 1953. Their entry into force was notified on 10 January 2019, in accordance with Section 4A.
The justification is given by the Amendment of the Treasury Laws (OECD Multilateral Instrument) Bill 2018. The rates applied to residents of DBA countries for the payment methods shown below are the lower domestic tax rates provided by the PNG Act or the rates indicated in each DBA. Current tax rates are as follows: income from work is generally considered to be 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. Most DTTs also contain an information exchange clause; However, the effect of these clauses is limited to the taxes in the DTT. 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. All information contained in this publication is collected by KPMG, the co-partner of KPMG International Cooperative (“KPMG International”), a Swiss unit based on the Papua New Guinea Income Act 1959 and Papua New Guinea Superannuation (General Provisions) Act 2000.