Papua New Guinea rewrote its income tax law for 2026. The Income Tax Act 2025 replaced the Income Tax Act 1959 from 1 January 2026, with a new 183-day residence test, a narrow capital gains tax and new rules for foreign income. The rates for residents didn't change: the first K20,000 is tax-free and the top rate is 42%.
This guide covers Papua New Guinea (PNG) personal tax for the 2026 tax year (1 January to 31 December 2026): residence, what PNG taxes, rates, the small business tax, superannuation, crypto, investments, pensions and visas.
The key question is simple. Are you resident, and is your income from work or from investments? A resident is taxed on worldwide income at up to 42%. But most capital gains, including gains on shares and crypto held as investments, are outside the tax.
What's changed: the Income Tax Act 2025, passed by Parliament on 20 March 2025 and certified on 20 October 2025, applies from the 2026 tax year. It replaces the old "more than six months" residence rule with a 183-day test and a split-year rule, brings in a 15% capital gains tax that only reaches resource rights and interests in resource companies, exempts foreign employment income that's taxed where you worked, and sets the small business tax at K250 a year for turnover under K60,000. The 2026 Budget made the K20,000 tax-free threshold permanent. For 2025, non-residents paid 30% salary tax from the first kina; under the new Act they pay 22% on the first K20,000.
📋 Papua New Guinea tax at a glance for 2026
Topic | Details |
|---|---|
Tax system | Residents are taxed on income from all sources, in and outside PNG. Non-residents are taxed on PNG income only |
Tax year | The calendar year (2026 tax year: 1 January to 31 December 2026) |
Income tax rates | 0% on the first K20,000 for residents, then 30%, 35% and 40%, and 42% above K250,000. Non-residents pay 22% on the first K20,000 |
All-in on a US$100k salary | About 38.4% (K447,000 at K4.47 to US$1, single, resident, before any superannuation) |
Capital gains | 15% capital gains tax, but only on resource rights, related information and interests in companies that mostly hold them. Other gains are untaxed unless you're trading |
Dividends and interest | 15% withheld from PNG dividends (a final tax) and PNG interest (credited against your tax). Foreign dividends and interest go on the scale |
Residence at a glance | Getting in: easy (living in PNG, or 183 days or more in a tax year, counted from your first day). Leaving: easy (residence stops on your last day in PNG if you're not resident the next year; no exit tax) |
Double tax treaties | 10 in force, including Australia, the UK, New Zealand, Singapore, China and Canada. None with the US |
The Income Tax Act 2025: what PNG taxes now
What does the new Act tax, and what does it leave alone?
Image 1 — a new Income Tax Act from 1 January 2026
Section 18 includes in a resident's assessable income everything from "all sources in and outside PNG": employment income, business income and property income (dividends, interest, rent, royalties, pensions and annuities). Non-residents are taxed only on PNG source income.
Three things sit outside that net for most expats:
Most capital gains. Capital gains tax (section 16) is 15%, but section 83 limits "taxable assets" to resource rights, information about them, interests in entities that get more than 50% of their value from them, and options over those. Gains on ordinary shares, property abroad or crypto held as investments aren't caught. Profits from trading, or from a profit-making scheme, are business income instead.
Foreign employment income taxed abroad. Schedule 3 exempts a resident's foreign employment income, including a pension related to foreign employment, but only where it's subject to tax in the country of employment.
PNG dividends. A PNG company withholds 15% from dividends it pays you, and that's a final tax (sections 151 and 161).
Where foreign income is taxed, you get a foreign tax credit (section 69) for the lower of the foreign tax and the PNG tax on that income. The foreign tax must be paid within two years after the end of the tax year, and any unused credit is lost rather than carried forward.
Much of the IRC's online guidance still describes the 1959 Act. Where the two differ, the 2025 Act applies from 1 January 2026.
👉 Internal Revenue Commission: legislation home, including the certified Income Tax Act 2025
👉 Internal Revenue Commission: Income Tax Act 2025 (certified copy, PDF scan)
When you become tax resident in PNG, and how you stop
Under section 10 of the new Act, you're a resident individual for a tax year if any of these applies:
You reside in PNG. Moving to PNG to live and work is usually enough on its own.
Your domicile is PNG, unless you have a permanent place of abode outside PNG.
183 days: you're physically present for 183 days or more in the tax year, unless your usual place of abode is outside PNG and you don't intend to take up residence. Any part of a day counts as a whole day, and short trips away for work or a holiday still count as days in PNG.
You're a PNG citizen working for the government abroad.
The Act has a split-year rule. If you weren't resident last year, you're treated as resident only from the first day you were in PNG. If you won't be resident next year, your residence ends on the last day you were in PNG. So a move in or out part-way through 2026 doesn't make your foreign income for the rest of the year taxable.
Leaving is simple in principle: move your home abroad and stay under 183 days a year. PNG has no exit tax. Once you're non-resident, PNG taxes only PNG income, such as rent from PNG property.
Short business trips have their own relief. A non-resident employee who is in PNG for no more than 90 days in a tax year, is taxed at home on the pay and is paid by a non-resident employer (not charged to a PNG branch) is exempt.
Income tax rates for 2026
PNG's tax year is the calendar year. Residents and non-residents pay the same rates above K20,000. The difference is the first K20,000: residents pay nothing, non-residents pay 22%.
Papua New Guinea income tax rates for 2026
Annual taxable income | Resident | Non-resident |
|---|---|---|
Up to K20,000 | 0% | 22% |
K20,001 to K33,000 | 30% | 30% |
K33,001 to K70,000 | 35% | 35% |
K70,001 to K250,000 | 40% | 40% |
Over K250,000 | 42% | 42% |
Source: Income Tax Act 2025, Schedule 1, Part I, clauses 1 and 2. Employers apply the same bands fortnightly through salary and wages tax (clauses 3 and 4).
Employers deduct salary and wages tax every fortnight. If your only income is salary taxed this way, you don't have to file a return, and the tax is final. Residents who support a spouse, children or other dependants get a small dependant tax credit, up to K450 for the first dependant.
👉 Internal Revenue Commission: salary and wages tax
👉 Department of Treasury: 2026 National Budget Volume 1 (K20,000 tax-free threshold made permanent)
Worked example
You're single, resident and work for a PNG employer for the whole of 2026, earning K447,000 (about US$100k at K4.47 to the dollar).
The first K20,000 is tax-free. You pay K3,900 at 30%, K12,950 at 35%, K72,000 at 40% and K82,740 at 42% on the K197,000 above K250,000.
Your total income tax is K171,590.
Your all-in bill is about K171,590, or 38.4% of your salary. If you're in a compulsory superannuation scheme, your 6% contribution of about K26,820 takes the total to about 44.4%.
Freelancing in PNG
If you're self-employed and resident, your business profit is taxed on the same scale as a salary, after business expenses. On US$100k (K447,000) of profit, that's about K171,590, or 38.4%. PNG has no social security contributions for the self-employed.
The small business tax looks tempting: a flat K250 a year if turnover is under K60,000, or K62.50 a quarter plus 2% of quarterly turnover above K15,000. But it's narrow. It's only for sole traders who run their business solely in PNG, aren't registered for GST and whose turnover is no higher than the GST registration threshold. It doesn't cover professional services: medical, dental, legal, accounting, financial, managerial, engineering, architectural, consulting or similar work. Most expat freelancers can't use it.
Watch the contractor rule in section 132. If you work under a contract for services, you're treated as an employee unless you meet a list of tests, including that no more than 80% of your income comes from one client. If you're treated as an employee, the client must withhold salary and wages tax from your fees.
You pay provisional tax in three instalments during the year, due on 30 April, 31 July and 31 October for most individuals.
👉 Internal Revenue Commission: small business tax
👉 Internal Revenue Commission: taxation of individuals, including provisional tax
Crypto, investments and pensions
Is crypto taxed in PNG? Not as a capital gain. Crypto isn't a "taxable asset" under section 83, so the 15% capital gains tax doesn't apply. The IRC hasn't published guidance on crypto. If you buy and sell often, or as part of a profit-making scheme, your profits can be business income taxed at up to 42% (section 23).
PNG dividends: 15% withheld by the paying company, and that's your final tax.
PNG interest: 15% withheld by the bank or company, credited against your tax on the return. The first K200 of bank interest a year is exempt.
Foreign dividends, interest and rent: taxed on the resident scale, with a foreign tax credit for tax paid abroad.
Gains on shares and property: not taxed unless the asset is a resource right or a company that mostly holds them, or you're trading.
Foreign pensions are where PNG bites. A resident is taxed on worldwide pension income at the normal rates. The exemption for a pension related to foreign employment only applies if that pension is subject to tax in the country where you worked. Many pensions paid to someone living abroad are taxed only in the country of residence under a tax treaty, so check how yours is treated before you move.
On a US$40k (K178,800) foreign pension plus US$20k (K89,400) of foreign investment income, the tax is about K96,494, or 36%. If the pension is exempt because it's taxed where you worked, the tax on the investment income alone is about K24,610, or 9.2% of the total.
PNG has no inheritance tax, gift tax or wealth tax among the taxes the IRC administers. Stamp duty can apply when property changes hands.
👉 Internal Revenue Commission: withholding taxes on dividends and interest
Superannuation
PNG doesn't have a social security tax. Instead, retirement saving is through compulsory superannuation, regulated by the Bank of Papua New Guinea under the Superannuation (General Provisions) Act 2000.
Who it covers: employees of employers with 15 or more staff, once they've been employed continuously for three months.
Rates: 6% of base salary from you and 8.4% from your employer, paid into an authorised superannuation fund.
Non-citizens: the law doesn't exclude you automatically. Your employer can apply to the Bank for an exemption if you contribute to a foreign superannuation fund instead.
Leaving PNG: a member who leaves can apply to withdraw, generally one year after departing.
Employer contributions to an approved fund aren't taxed as your income, and the employer can deduct up to 15% of your taxed pay.
👉 Bank of Papua New Guinea: employer and employee superannuation contributions
👉 Bank of Papua New Guinea: Superannuation (General Provisions) Act 2000
Double tax treaties
Does PNG have double tax treaties? Yes, but not many. The IRC lists 10 in force: Australia, Canada, China, Fiji, Indonesia, Korea, Malaysia, New Zealand, Singapore and the UK. A treaty with Germany has been signed but isn't in force, and there's no treaty with the United States. A treaty overrides the Act where they conflict, which can decide who taxes your pension.
👉 Internal Revenue Commission: international tax agreements in force
Visas and long stays
PNG has no digital nomad visa, and no visa that lets you stay long-term to work remotely. The Immigration and Citizenship Authority's main routes are:
Visitor visa: for holidays and family visits, usually a single entry of 60 days.
Business visa: for short business activities such as trade missions or negotiating a deal, usually 30 days. It isn't a work visa: paid work needs an employment visa.
Employment visa: for paid work in PNG. A PNG sponsor applies for the work permit and visa together through the Sponsor Portal.
👉 Immigration and Citizenship Authority: Visitor visa
👉 Immigration and Citizenship Authority: Employment visa
👉 Immigration and Citizenship Authority: Business visa
Who is Papua New Guinea good for?
How does PNG compare for different kinds of mover? Ratings are relative to the 150+ countries TaxPilot covers, based on 2026 rules and the all-in cost. We convert at K4.47 to US$1, close to the Bank of Papua New Guinea rate in October 2026 (about US$0.224 per kina).
☑️ Who is Papua New Guinea good for? Tax ratings for expats in 2026
Expat profile | Papua New Guinea rating | Why |
|---|---|---|
Employees | Poor | About 38.4% on a US$100k salary (K447,000), all income tax: 30% to 42% above the K20,000 tax-free band. There's no social security tax and no special regime for people moving to PNG. If you're in compulsory superannuation, your 6% contribution takes it to about 44.4%. |
Freelancers (self-employed) | Poor | About 38.4% on US$100k of profit, on the same scale as salaries. The small business tax (a flat K250, or 2% of turnover above K15,000 a quarter) excludes consulting and other professional services and is capped at the GST registration threshold, so it doesn't fit a typical freelancer. |
Retirees | Poor | About 36% on a US$40k foreign pension plus US$20k of foreign investment income, because residents are taxed on worldwide income. A pension from foreign employment is exempt only if it's taxed in the country where you worked: if yours is, the bill falls to about 9.2% (Good). PNG has no inheritance or wealth tax. |
Crypto gains | Good | Capital gains tax only applies to resource rights and interests in resource companies, so a gain on crypto held as an investment isn't taxed. If you buy and sell as a business or a profit-making scheme, profits are business income at up to 42%. There's no IRC guidance on crypto. |
Investment income | Moderate | About 16.9% on a US$1m foreign portfolio: 4% income (K178,800) taxed on the resident scale, with 4% realised gains untaxed. Dividends from PNG companies would cost 15% withheld as a final tax, about 7.5% of the scenario (Good). |
Digital nomad visa | Poor | PNG has no digital nomad visa. Visitor visas are usually for 60 days and business visas for 30 days, and paid work needs an employment visa and work permit sponsored by a PNG employer. |
Filing and deadlines
The tax year is the calendar year, and you deal with the IRC through myIRC. Under the new Act:
Employees: if your only income is salary with tax deducted, you don't need to file. You can choose to file within a year if too much tax was deducted.
Everyone else: file your 2026 return within three months after the year ends, so by 31 March 2027. Tax on a self-assessed return is due the same day.
Provisional tax: three instalments, by 30 April, 31 July and 31 October 2026.
Small business tax: annual returns within 28 days after the year ends, or quarterly returns within 28 days after each quarter.
Employers: pay salary and wages tax deducted by the 7th of the following month.
The IRC is still updating its forms and guides for the new Act, so check myIRC for the current forms before you file.
👉 Internal Revenue Commission: tax law amendments, including the 2025 Budget Acts
Frequently asked questions
When do I become tax resident in Papua New Guinea?
Under the Income Tax Act 2025 you're resident if you reside in PNG, if your domicile is PNG and you have no permanent home abroad, or if you're in PNG for 183 days or more in a tax year (unless your usual home is abroad and you don't intend to take up residence). In the year you arrive, residence runs from your first day in PNG.
What are the income tax rates in Papua New Guinea for 2026?
Residents pay 0% on the first K20,000, 30% up to K33,000, 35% up to K70,000, 40% up to K250,000 and 42% above that. Non-residents pay 22% on the first K20,000 and the same rates above it.
Does Papua New Guinea have a capital gains tax?
Yes, from 1 January 2026, at 15%. But it only applies to resource rights, information about them and interests in companies that get most of their value from them. Gains on ordinary shares, foreign property and crypto held as investments aren't taxed, unless you're trading.
Does Papua New Guinea tax foreign income?
Yes, for residents. Foreign dividends, interest, rent and pensions are taxed on the normal scale, with a credit for foreign tax paid. Foreign employment income, including a pension from foreign employment, is exempt if it's taxed in the country where you worked.
Can a freelancer use the small business tax in PNG?
Usually not. The small business tax is only for sole traders working solely in PNG who aren't registered for GST, and it excludes professional services such as consulting, accounting, legal, engineering and financial work. Most freelancers pay income tax on the normal scale.
Does Papua New Guinea have a digital nomad visa?
No. Visitor visas are usually for 60 days and don't cover work. Paid work in PNG needs an employment visa and work permit, applied for by a PNG sponsor.
Where to go next
Important information
This article is general information and does not constitute tax, legal, immigration or financial advice, and does not create a client relationship. Tax outcomes depend on travel history, income sources, treaty status and the law applying to the relevant year. Rates, thresholds and regimes change, and some measures described may be proposed rather than enacted; this article reflects our understanding as at the date of publication. Obtain advice from a suitably qualified professional before acting or refraining from action.
