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Papua New Guinea Consolidated Legislation |
Chapter 111.
Income Tax, Dividend (Withholding) Tax and Interest (Withholding) Tax Rates Act 1984.
Certified on: / /20 .
INDEPENDENT STATE OF PAPUA NEW GUINEA.
Chapter 111.
Income Tax, Dividend (Withholding) Tax and Interest (Withholding) Tax Rates Act 1984.
ARRANGEMENT OF SECTIONS.
INDEPENDENT STATE OF PAPUA NEW GUINEA.
AN ACT
entitled
Income Tax, Dividend (Withholding) Tax and Interest (Withholding) Tax Rates Act 1984,[1]
Being an Act to declare the rates of income tax and dividend (withholding) tax and for related purposes to be read as one with the Income Tax Act 1959.
PART I. – PRELIMINARY.
In this Act–
“taxable income” means a taxable income of the year of income;
[2]“new petroleum project” means a petroleum project which did not, prior to 31 December 2000, derive any assessable income from petroleum operations.
PART II. – IMPOSITION OF INCOME TAX AND DIVIDEND (WITHHOLDING) TAX.
The rates of income tax and dividend (withholding) tax for the fiscal year commencing on 1 January 1982, and except as provided otherwise by Act for each subsequent fiscal year, are the rates specified in this Act and no others.
PART III. – RATES OF INCOME TAX.
(1)[3] [4]Subject to Subsection (2), the rates of income tax payable by a resident person other than a company are as set out in Schedule 1.
(1A)[5] [6]The rates of income tax payable by a non-resident person other than a company are as set out in Schedule 1A.
(2)[7] [8]Where a taxpayer’s assessable income includes, in addition to salary or wages, any other income other than salary or wages, the tax payable on that income which has not borne salary or wages tax shall be calculated in accordance with the following formula:–
A - B = C
where–
“A” = gross tax payable under Schedule 1 on income equivalent to the total of salary or wages received (but not including income or payments to which Section 1(2) of the Income Tax (Salary or Wages Tax) (Rates) Act 1979 applies), plus taxable income other than salary or wages;
“B” = gross tax payable under Schedule 1 on income equivalent to the total of salary or wages received (but not including income or payments to which Section 1(2) of the Income Tax (Salary or Wages Tax) (Rates) Act 1979 applies);
“C” = gross tax payable on taxable income other than salary or wages.
The rate of income tax on taxable income in any case where Section 80, 117(2) or 212 of the Principal Act applies, is as set out in Schedule 2.
(1)[9] [10]The rate of income tax payable by a trustee on the net income of a trust estate (other than a unit trust) is as set out in Section Sch. 3.1.
(2) The rate of income tax on distributions of income of a trust estate, payable by a trustee, is as set out in Section Sch. 3.2.
(3)[11] [12]The rate of income tax payable by a trustee on the net income of a unit trust is set out in Schedule 3.3.
(1)[13] [14]The rates of income tax payable by a company, other than–
(a) a company in the capacity of trustee; or
(b) a company in which Section 154C of the Principal Act applies; or
(c) a unit trust,
as are set out in Schedule 4.
(2) The rates of income tax payable by a company to which Section 154C of the Principal Act applies are as set out in Schedule 6.
(3) Notional tax or instalments of notional tax is or are payable by a company in accordance with the provisions of Part VI.lA of the Principal Act in respect of the fiscal year commencing 1 January 1980 and for each subsequent fiscal year.
6A. RATE OF TAX PAYABLE BY FOREIGN CONTRACTORS.
[15]The rate of tax imposed by this Act upon income to which Section 196C of the Income Tax Act 1959 applies is 48% of the taxable income.
6B. MANAGEMENT FEE WITHHOLDING TAX.
[16]The rate of tax imposed by this Act upon income to which Division III.14C of the Income Tax Act 1959 applies is 17% of the gross amount of the taxable management fee.
[17]The rate of tax imposed by this Act on income to which Section 4C (other than assessable income from mining operations or assessable income from petroleum operations or assessable income from gas operations) of the Principal Act applies is–
(a) where the recipient is an associated person–30% of the assessable income; or
(b) where the recipient is not an associated person–10% of the assessable income or 48% of the taxable income whichever is the lesser.
8 - 9[18]. [REPEALED.]
PART IV. – RATES OF DIVIDEND (WITHHOLDING) TAX.
The rate of dividend (withholding) tax payable in respect of–
(a)[19] dividends paid by a resident company other than by a company carrying out mining operations, incorporated before 31 December 1982–
(i) on or before 8 August 1983, the date on which the Income Tax (Dividend (Withholding) Tax) (Rates) (Amendment) Act 1983 came into Operation is 15%; and
(ii) after 8 August 1983 but before 1 January 1984 which, when added to all other dividends paid by the company during the year ended 31 December 1983, exceed the total amount of dividends paid during the year ended 31 December 1982 is–
(A) to the extent that total is exceeded–17%; and
(B) in respect of any other portion–15%; and
(iii) on or after 1 January 1984 is 17%; and
(b)[20] dividends (other than unit trust dividends) paid by a resident company incorporated after 31 December 1982–
(i) on dividends paid before 1 January 1984 is 15%; and
(ii) on dividends paid on or after 1 January 1984 is 17%; and
(c) dividends received by a resident company from a source outside Papua New Guinea–
(i) before 1 January 1984 is 15%; and
(ii) on or after 1 January 1984 is 17%; and
(d)[21] dividends paid by a company carrying out mining operations is 10%.
(e)[22] [Repealed.]
PART V.[23] – RATES OF INTEREST (WITHHOLDING) TAX.
10A. RATE OF INTEREST (WITHHOLDING) TAX.
[24]The rate of Interest (Withholding) Tax payable shall be 15% of the gross interest income in the case of a resident and a non resident taxpayer.
SCHEDULE 1 – [25]GENERAL RATES OF INCOME TAX ON TAXABLE INCOME PAYABLE BY PERSONS OTHER THAN COMPANIES[26].
Sec. 3.
The rate of income tax for each part of the taxable income specified in Column 1 of the following table is the percentage of that part set out in Column 2 of that table opposite the reference to that part of the taxable income in Column 1:–
| Column 1 Parts of Taxable Income | Column 2 Percentage |
|---|---|
| The part of the taxable income that:– | |
| does not exceed K5,500.00 | 0 |
| exceeds K5,500.00 but does not exceed K16,000.00 | 25 |
| exceeds K16,000.00 but does not exceed K70,000.00 | 35 |
| exceeds K70,000.00 but does not exceed K95,000.00 | 40 |
| exceeds K95,000.00 | 47 |
SCHEDULE 1A – [27]GENERAL RATES OF INCOME TAX ON TAXABLE INCOME PAYABLE BY NON-RESIDENT PERSONS OTHER THAN COMPANIES.
Sec. 3.
The rate of income tax for each part of the taxable income specified in Column 1 of the following table is the percentage of that part set out in Column 2 of that table opposite the reference to that part of the taxable income in Column 1:–
| Column 1 Parts of Taxable Income | Column 2 Percentage |
|---|---|
| The part of the taxable income that:– | |
| does not exceed K16,000.00 | 25 |
| exceeds K16,000.00 but does not exceed K70,000.00 | 35 |
| exceeds K70,000.00 but does not exceed K95,000.00 | 40 |
| exceeds K95,000.00 | 47 |
SCHEDULE 2 – RATE OF INCOME TAX ON TAXABLE INCOME BY REFERENCE TO A NOTIONAL INCOME.
Sec. 4.
In respect of the taxable income of a taxpayer deriving a notional income, as specified by Section 80,117(2) or 212 of the Principal Act, the rate of income tax payable shall be determined–
(a) by ascertaining the amount of income tax that would be payable under Schedule 1 on a taxable income equal to the notional income; and
(b) by expressing the amount so ascertained as a percentage of the amount of the notional income,
and the percentage so expressed is the rate of tax payable on the taxable income of the taxpayer.
SCHEDULE 3 – RATES OF INCOME TAX IN RELATION TO TRUST ESTATES.
Sec. 5.
Sch. 3.1.[28] Trustees.
[29]In respect of the net income of a trust estate in respect of which a trustee is liable, under Section 130 of the Principal Act, to be assessed and to pay tax, the rate of income tax is 28%.
Sch. 3.2.[30]Non-resident beneficiaries.
[31]In respect of a distribution of the income of a trust estate (other than a unit trust) in respect of which a trustee is liable, under Section 135 of the Principal Act, to be assessed and to pay tax, the rate of income tax is 10% of the amount of the distribution.
Sch. 3.3.[32]Unit trust.
[33]In respect of the net income of a unit trust in respect of which a trustee is liable to pay tax under Section 136C, the rate of income tax is 30%.
SCHEDULE 4 – RATES OF INCOME TAX PAYABLE BY A COMPANY OTHER THAN A COMPANY IN THE CAPACITY OF A TRUSTEE.
Sec. 6.
Sch. 4.1.[34] Resident corporations (other than petroleum mining companies) of Papua New Guinea.
[35]In the case of a company (other than in respect of assessable income from petroleum operations or assessable income from mining operations) under or in a special mining lease or mining project that is a resident corporation of Papua New Guinea, the rate of income tax (other than additional tax under Section 138 of the Principal Act) is in relation to income derived on or after 1 January 1993, 25% of the taxable income.
Sch. 4.2.Non-resident corporations (other than petroleum mining companies).
In the case of a company (other than a company that derives assessable income from petroleum) that is a non-resident corporation, the rate of income tax is 48% of the taxable income.
Sch. 4.3.[36]Unincorporated associations, etc.
[37]In the case of a company (other than in respect of assessable income from petroleum operations or assessable income from mining operations) that is not a corporation, the rate of income tax is in relation to income derived on or after 1 January 1993, 25%. of the taxable income.
Sch. 4.4.[38]Mining, Petroleum and Gas Income.
[39]The rate of tax in respect of assessable income from–
(a)[40] petroleum operations attributable to a new petroleum project is 45% of the assessable income; and
(b) petroleum operations from other than those in Paragraph (a) above is 50% of the assessable income; and
(c)[41] mining operations is 30% of taxable income; and
(d)[42] [Repealed.]
(e) gas operations is 30% of the taxable incomes.
Sch. 4.5.Interest paid by companies to non-residents.
In respect of an amount of interest on which a company is liable, under Section 186(1) of the Principal Act, to pay income tax, the rate of income tax is 48% of that amount.
Sch. 4.6.Interest paid by companies on bearer dividends.
In respect of an amount of interest on which a company is liable, under Section 187(1) of the Principal Act, to pay income tax, the rate of income tax is 48% of that amount.
Sch. 4.7[43]. [Repealed.]
SCHEDULE 5 – . . . . . . . .
SCHEDULE 6 – RATES OF INCOME TAX PAYABLE UNDER SECTION 154C OF THE PRINCIPAL ACT.
Sec. 6.
Sch. 6.1. First K50,000.00 of taxable income.
In respect of the first K50,000.00 of taxable income, the rate of tax is nil.
Sch. 6.2.Income above K50,000.00.
In respect of so much of the taxable income that exceeds K50,000.00 the rate of income tax (other than additional tax under Section 138 of the Principal Act) is 35%.
SCHEDULE 7 – . . . . . . . .
OFFICE OF LEGISLATIVE COUNSEL, PNG
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