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Stamp Duty

Stamp duty (duty) in Papua New Guinea is payable on the transfer, agreement for sale, declaration of trust over, or grant of certain property. The amount of duty payable will depend on the type of property and its value

For more information select one of the topics listed below.

  1. Conveyances or Transfers on the Sale of Real Property
  2. Sales of apartments, etc under company title
  3. Transfers of Marketable Securities
  4. Leases or Agreements for Leases of Land and Goods
  5. Deed of Gift
  6. Deed of Settlement
  7. Partitions or Divisions of Real Property
  8. Partitions or Divisions of the interest of lessees under leases of land in the Country
  9. Transfer and Assignment of Leases of Land in the Country
  10. Transfers of Mining and Petroleum interests
  11. Acquisition of Interests in Landholding Private Corporations
  12. Betting Tickets
  13. Lottery Tickets

Conveyances or Transfers on the Sale of Real Property

People who purchase real property (houses, land, land and improvements or commercial premises) located in Papua New Guinea must pay duty on that purchase.

Duty Amount
Duty is calculated on the market value of the property.

Where the value does not exceed K35,000.00 K5.00 or an amount equal to 2 per cent of the value, whichever is the greater
Where the value xceeds K35,000.00 but does not exceed K70,000.00 An amount equal to 3 per cent of the value
Where the value exceeds K70,000.00 but does not exceed K140,000.00 An amount equal to 4 per cent of the value
Where the value exceeds K140,000.00 An amount equal to 5 per cent of the value

Duty is payable by the purchaser or the person deemed to be the purchaser, or the person to whom the property is agreed to be conveyed.

Compliance Obligations/Requirements
Where the instrument was executed in Papua New Guinea purchasers or their legal representatives are required to lodge the contract or transfer and pay the duty within 60 days from the date the instrument was first executed.

Where the instrument was executed outside Papua New Guinea purchasers or their legal representatives are required to lodge the contract or transfer and pay the duty within 60 days of arrival in Papua New Guinea or within 180 days from the date the instrument was first executed whichever date transpires first.

You should be aware that giving false or misleading information is a serious offence.

Documents Required on Lodgement

  • A completed Application for Impressed Duty Stamp Form.
  • The contract for the purchase of the property containing the vendor’s (selling parties signature) or both signatures is required. You should also lodge the Memorandum of Transfer at the same time this will assist you settle the sale of the property.

NOTE:
Your contract and Memorandum of Transfer must be stamped by the Internal Revenue commission before the Land Titles Office will place your name on the title of the property.

If you are buying a home that you intend to live in you may be eligible for the First Home Buyers concessions, refer to the information provided under Home Buyers concessions.

If a duplicate copy is required each duplicate is charged duty of K5. A duplicate is a second or subsequence copy of an instrument having the form and face of the original.

Sales of apartments, etc under company title
People can also purchase shares which gives a right of occupancy of a unit of real property such as a apartment, flat etc.

The acquisition of shares in the company entitles the purchaser to exclusive occupancy of a particular portion or area of the lease or property of the company, to deal with as the purchaser wishes

Duty Amount

    • The agreement for sale of the shares is Nil as the duty is paid on the share transfer.
    • The share transfer is assessed on the value under Item 16, transfers of land use entitlement.
Where the value does not exceed K35,000.00 K5.00 or an amount equal to 2 per cent of the value, whichever is the greater
Where the value exceeds K35,000.00 but does not exceed K70,000.00 An amount equal to 3 per cent of the value
Where the value exceeds K70,000.00 but does not exceed K140,000.00 An amount equal to 4 per cent of the value
Where the value exceeds K140,000.00 An amount equal to 5 per cent of the value
  • The transfer of the sub-lease K25.00 or if it is a new sub-lease K10.00. clarify

Duty is payable by the purchaser or transferee.

Compliance Obligations/Requirements
Where the instrument was executed in Papua New Guinea purchasers or their legal representatives are required to lodge the contract or transfer and pay the duty within 60 days from the date the instrument was first executed.

Where the instrument was executed outside Papua New Guinea purchasers or their legal representatives are required to lodge the contract or transfer and pay the duty within 60 days of arrival in Papua New Guinea or within 180 days from the date the instrument was first executed whichever date transpires first.

You should be aware that giving false or misleading information is a serious offence.

Documents Required on Lodgement

  1. A completed Application for Impressed Duty Stamp Form.
  2. The contract for the purchase of the shares containing the vendor’s (selling parties signature) or both signatures is required.
  3. The Share Transfer
  4. The new sub-lease or the transfer of the sub-lease or transfer of portion of title of the leasehold.
  5. Where applicable any elections done under section 78A of the Income Tax Act should also be lodged.at the same time this will assist you settle the sale of the property.

NOTE:
If you are buying a home that you intend to live in you may be eligible for the First Home Buyers concessions, refer to the information provided under Home Buyers concessions.

If a duplicate copy is required each duplicate is charged duty of K5. A duplicate is a second or subsequence copy of an instrument having the form and face of the original.

Transfers of Marketable Securities

When you acquire marketable securities (shares, units and interests) that are dutiable property in the PNG from another person, you must pay duty on that purchase

Please note that duty on the transfer of marketable securities listed on a the Port Moresby Stock Exchange where the sale is effected through a broker registered to operate on the Port Moresby Stock Exchange under Papua New Guinea law is exempt from duty.

If the entity owns land in the PNG please refer to the notes under “Interests in Landholding Private Corporations”.

Duty Amount

  1. Transfers of marketable securities or rights to the issue of shares, and directions as to the issue of allotment of shares. An amount equal to 1 per cent of the value or K0.10 whichever is the greater
  2. Duty is payable by the purchaser, transferee or donee.

Compliance Obligations/Requirements
Where the instrument was executed in Papua New Guinea purchasers or their legal representatives are required to lodge the contract or transfer and pay the duty within 60 days from the date the instrument was first executed.

Where the instrument was executed outside Papua New Guinea purchasers or their legal representatives are required to lodge the contract or transfer and pay the duty within 60 days of arrival in Papua New Guinea or within 180 days from the date the instrument was first executed whichever date transpires first.

You should be aware that giving false or misleading information is a serious offence.

Documents Required on Lodgement

  1. A completed Application for Impressed Duty Stamp Form.
  2. The latest balance sheet of the company
  3. The contract for the purchase of the marketable security containing the vendor’s (selling parties signature) or both signatures is required. You should also lodge the any Transfer instruments at the same time this will assist you settle the sale of the marketable security.

NOTE:
Your share sale agreement and/or Transfer form must be stamped by the Internal Revenue Commission before the company can place your name on their share registry.

If a duplicate copy is required each duplicate is charged duty of K5. A duplicate is a second or subsequence copy of an instrument having the form and face of the original.

Leases or Agreements for Leases of Land and Goods
A lease includes any promise of, or arrangement for, a lease of land/goods in the country, and includes any instrument whereby a right to use at or during any time or times any land or goods in PNG.

Provisions have been made under section 10A of the Act for car and other hire companies to collect and remit the stamp duty applicable by means of a monthly stamp duty return, otherwise each agreement has to be lodged for assessment and payment duty at the Stamp Duties Office. An application for approval to lodge monthly returns is available from the office, also see notes under “Section 10A monthly returns”

Duty Amount

a lease for up to 5 years
for the first K240.00 (or part thereof) of the rent for the lease period K5.00
for the remainder
an amount equal to 0.4 per cent of so much of the rent for the lease period as exceeds K240.00
a lease for 5 years or more
for the first K240.00 (or part thereof) of the rent for the lease period K10.00
for the remainder
an amount equal to 1.0 per cent of so much of the rent for the lease period as exceeds K240.00

Duty is payable by the parties or any one or more of them.

Compliance Obligations/Requirements
Where the instrument was executed in Papua New Guinea the parties or their legal representatives are required to lodge the lease and pay the duty within 60 days from the date the instrument was first executed.

Where the instrument was executed outside Papua New Guinea parties or their legal representatives are required to lodge the contract or transfer and pay the duty within 60 days of arrival in Papua New Guinea or within 180 days from the date the instrument was first executed whichever date transpires first.
You should be aware that giving false or misleading information is a serious offence.

Documents Required on Lodgement

  1. A completed Application for Impressed Duty Stamp Form.
  2. The lease agreement containing both signatures is required.
    If a duplicate copy is required each duplicate is charged duty of K5. A duplicate is a second or subsequence copy of an instrument having the form and face of the original.

Deed of Gift
All deeds of gift, whether as a single instrument or as one of several instruments, if combined, would constitute a deed of gift is liable for stamp duty. Deed of gift is defined in the Act, basically a deed of gift is where any property is given, allotted, transferred or conveyed for less than the full value of the property.

Duty Amount

Where the value of the gift does not exceed K35,000.00 K5.00 or an amount equal to 2 per cent of the value of the gift, whichever is the greater
Where the value of the gift exceeds K35,000.00 but does not exceed K70,000.00 An amount equal to 3 per cent of the value of the gift
Where the value of the gift exceeds K70,000.00 but does not exceed K140,000.00 An amount equal to 4 per cent of the value of the gift
Where the value of the gift exceeds K140,000.00 An amount equal to 5 per cent of the value of the gift

Duty is payable by the purchaser or the donee.

Deed of Settlement
All deeds of settlement, whether a single instrument or one of several instruments, if combined, would constitute a deed of settlement are liable to stamp duty.

Deeds of settlement, are defined in the Act

Instruments (whether revocable or not, and whether made voluntarily or for good and valuable consideration [other than for a bona fide adequate pecuniary consideration]), by which;

  • property is settled or agreed to be settled, or.
  • property is held in a created trust, and not a created trust for religious, charitable or educational purposes; or
  • acknowledgment of oral trust

will usually be a deed of settlement.

All deeds of settlement are assessable on the actual value of the settlement as at the date the trust was established

Duty Amount
Duty is payable by the settlor.

Where the value of the property in relation to which an instrument is a deed of settlement-
does not exceed
K35,000.00 K5.00 or an amount equal to 2 per cent of the value, whichever is the greater
exceeds K35,000.00 but does not exceed K70,000.00 An amount equal to 3 per cent of the value
exceeds K70,000.00 but does not exceed K140,000.00 An amount equal to 4 per cent of the value
exceeds K140,000.00 An amount equal to 5 per cent of the value

Partitions or Divisions of Real Property
Every agreement or other document which effects the partition or division of real property in the country is chargeable with stamp duty under this heading.

Duty Amount

Where the value does not exceed K35,000.00 K5.00 or an amount equal to 2 per cent of the value of the gift, whichever is the greater
Where the value exceeds K35,000.00 but does not exceed K70,000.00 An amount equal to 3 per cent of the value of the gift
Where the value exceeds K70,000.00 but does not exceed K140,000.00 An amount equal to 4 per cent of the value of the gift
Where the value exceeds K140,000.00 An amount equal to 5 per cent of the value of the gift
Duty is payable by the parties, or any one or more of them.

Partitions or Divisions of the interest of lessees under leases of land in the Country

Every agreement or other document which effects the partition or division of any interest of a lessee under a lease relating to land in the country is chargeable with stamp duty under this heading.

Duty Amount

Where the value does not exceed K35,000.00 K5.00 or an amount equal to 2 per cent of the value of the gift, whichever is the greater
Where the value exceeds K35,000.00 but does not exceed K70,000.00 An amount equal to 3 per cent of the value of the gift
Where the value exceeds K70,000.00 but does not exceed K140,000.00 An amount equal to 4 per cent of the value of the gift
Where the value exceeds K140,000.00 An amount equal to 5 per cent of the value of the gift

Duty is payable by the parties, or any one or more of them.

Transfer and Assignment of Leases of Land in the Country

All transfers and assignments of leases of land in the country are liable to stamp duty under this item

Duty Amount

Where the consideration does not consist of or include money, marketable securities, or other property K25.00
Where the consideration does not consist of or include money, marketable securities, or other property and the value of the consideration:-
does not exceed K35,000.00
K5.00 or an amount equal to 2 per cent of the value, whichever is the greater
exceeds K35,000.00 but does not exceed K70,000.00 An amount equal to 3 per cent of the value
exceeds K70,000.00 but does not exceed K140,000.00 An amount equal to 4 per cent of the value
exceeds K140,000.00 An amount equal to 5 per cent of the value

Transfers of Mining and Petroleum Interests
Stamp Duty is charged on the transfers of Mining and Petroleum interests under the same head of charge that charges stamp duty on the transfers of real property.

The mining and petroleum industry is given concessional treatment in that there are concessions for:- Transfers of exploration licences

Where exploration licences are not transferred for more than the historical cost of obtaining the mining information a concessional rate of K10,000.00 is charged, this designed to encourage mining and petroleum exploration in the country. If the transfer is for more than the historical cost of obtaining the mining information duty is charged at 2% on the excess.

Transfers of mining information
The duty on the transfer of mining information for both exploration and develoment licences is limited to K10,000.00, again this is designed to encourage mining and petroleum exploration in the country.

Transfers of development licences
The stamp on the transfer of real property valued at over K140,000, is 5% of the value of the property However in the cases of development licences this amount is reduced to 2%. This concession is given as companies are more likely to explore if they can realise any funds in more than one way i.e. If they can sell their find to some one who can develop it. This hopefully will make development more likely, the argument being that the full rate of 5% detered both exploration and development if the explorer cannot fund development itself.

Stamp duty on LNG Projects
Stamp duty on transfers to restructure the ownership of the LNG project is capped at K5,000.00 in the following cases:-

  • Where transfers are between LNG Project Companies and their affiliates and the transfer makes no change to the total company group interest in the LNG Project;
  • Where transfers are between LNG Project Companies by operation of the LNG Project Agreements;
  • Where the transfers are entered into between LNG Project Companies and their affiliates prior to 31 December of the year which includes the Offer Licence Transfer Date.

NOTE

  • There are also concession for transfers as a result of company reorganisations, the duty is limited to K600.00 per transaction up to a maximum of K12,500.00.
  • Stamp duty on loan agreements and loan securities was abolished 1 January 2008

Acquisition of Interests in Landholding Private Corporations
Stamp duty is payable on the transfers of marketable securities in private corporations at the higher conveyance rates of duty on the value of the land. The provision are contained in Division 10A of the Act, basically the intention of this division is to prevent the avoidance of conveyance duty by the indirect acquisition of land by of certain transfers of shares and units in landholding entities. The division only applies to private corporations as defined in the division.

A liability to duty does not arise on the acquisition of any interest in a relevant private corporations. It must be a majority interest. A majority interest is an interest than in the event of a distribution of all property of the corporation immediately after the interest was acquired would entitle the acquirer 50% or more of the property distributed. The ways in which an interest may be “acquired” is described in section 78H and include a variation of rights and the allotment, redemption, surrender or cancellation of any share or unit.

The duty extends to the acquisition of interests in a landholding private corporation that is itself a majority interest or that when aggregated with other such interests held by the person or an associated person results in an aggregation that amounts to the majority interest in the corporation.

Duty is payable not only on the acquisition of a majority interest but also where a person who has a majority interest acquires a further interest in a relevant land- rich entity.

In addition to any interest in land or other property that may hold in its own right, a private corporation shall be taken for the purposes of Division !0A to hold an interest in land or other property held by a subsidiary of the private corporation.

Duty must be paid by the preparation of a acquisition statement (see copy under “All Other Taxes Branch Forms” on this website) by the person who makes the relevant acquisition. The statement is to be lodged with the share transfer. Normal marketable security duty will be payable on the share transfer, and a credit is given.

Example

Company Assets Land K200,000

Other K80,000

Liabilities KNIL

  • Duty on share transfer (on a net assets basis)
    K280,000 @ 1% =K2,800
  • Duty on acquisition statement
    K200,000 @ 5% =K10,000

less credit for duty on share transfer

K200,000

K280,000 * K2,800 =K2,000

K8,000

Total duty payable is =K10,800

A valuation of the real property by a valuer as defined in the Act or other evidence of the property as the Collector thinks fit must accompany the statement. For example evidence of an arms length sale of the property in the preceding 12 months may be acceptable.

Duty is payable by the transferee or assignee.

Betting Tickets
Stamp duty is payable on a betting ticket made out in respect of a bet as follows:-

of an amount not exceeding K5.00 K0.50
of an amount exceeding K5.00 but not exceeding K10.00 K1.00
of an amount exceeding K10.00 but not exceeding K20.00 K2.00
of an amount exceeding K20.00 but not exceeding K50.00 K3.00
of an amount exceeding K50.00 but not exceeding K100.00 K4.00
of an amount exceeding K100.00 K5.00

The bookmakers can recover the turnover tax and stamp duty on the betting tickets from their punters.

Lottery Tickets
Stamp duty is payable on tickets, coupons or other document evidencing that the holder thereof has acquired a share in any lottery, drawing, sweep or game for a prize.

Duty is payable by the promoter.

Interim Stamping
Under Section 46(7) and 47(9) of the Stamp Duties Act, if duty on certain instruments cannot be immediately ascertained, the duty may be paid on so much as is ascertainable and the instrument will be marked ‘interim stamp only’. The document must be returned to the Stamp Duties Office as soon as the balance of duty payable can be ascertained and upon payment, will be marked as “duly stamped”.

Monthly Returns
Section 10A of the Stamp Duties Act provides for the payment of stamp duty on a monthly basis. Subject to approval of the Collector of Stamp Duties this procedure is available to persons liable for duty on a large number of instruments on a regular basis. Application forms for approval to lodge monthly returns are available from the Stamp Duties Office. The dutiable instruments do not have to be submitted to the Stamp Duties Office but a summary is provided on a return form and duty assessed accordingly.

Many classes of instruments are permitted to be treated in this manner, such as lease of land or goods. However these arrangements will not be applied to transfers of shares or real property and transfer of leases. These instruments must be lodged with the Stamp Duties Office for impress stamping.

Objections against Duty Assessed
Within 30 days after the date of an assessment or an amended assessment and on payment of the duty and any penalty assessed, a person who is dissatisfied with an assessment may object in writing to the Collector of Stamp Duties, stating in detail the grounds for the objection (Section 20A Stamp Duties Act).

Appeals Against Objection Decisions
If a person is then dissatisfied with the decision on his objection, he may, within 60 days of the date of the objection notice, appeal to the National Court in accordance with the National Court Rules, against the assessment stating his grounds of appeal.

Refunds of Stamp Duty

Where stamp duty is paid on an instrument that is not subsequently executed Section 91(1)), or where the subject agreement (for the exchange/transfer sale of real property or leases) is annulled or rescinded (Sections 48,55 and 55A) the person who paid the duty may apply for a refund of the duty paid. A refund of duty can also be claimed where unused duty stamps or stamped material is no longer required, or where duty stamps or stamped material is inadvertently spoiled, used or cancelled (Section 91(2)).

Note:The Stamp Duties Act and Regulations provides for a specified deduction from any refund due.

  • Rescissions/Annulments (Section 48) – the amount of any stamp duty, other than ad valorem duty, plus 5% of the ad valorem duty or K2.00 whichever is the less.
  • Unused Stamps/Stamped Material, Spoiled Stamps/Stamped Material – less 5% of the unused stamp or stamped material.

The First Home Buyer Scheme

This scheme is intended to give Papua New Guinean citizens relief from stamp duty on the purchase of a home for their personal occupation.

The normal rate of stamp duty would be 5% of the value of the property, if it is worth more than K140,000. e.g. if a property is worth K150,000 duty @ 5% is K7,500

However the first home purchased for personal occupation is exempted if the value of the property is under K210,000 and concessional rates apply if the property is over K210,000.

There is also a concession given to Papua New Guinean citizens on the purchase of a property for their personal occupation and they have previously owned a property that they lived in. If the value of that property is under K210,000 the duty is only 2% and further concessional rates apply if the property is over K210,000.

To qualify for the exemption:-

  • you must be a Papua New Guinean citizen,
  • neither you nor your spouse can have owned a residential home previously; and
  • you must live in the property.

To qualify for the other home concessions you have to be a Papua New Guinean citizen and you must live in the property.

There is also a special concessional rate of stamp duty given to Papua New Guinean citizens for the purchase of a second property for their personal occupation, and they will also still live in their first property. If the value of the property is under K210,000 the duty is only 2% and further concessional rates apply if the property is over K210,000. This concessional rate would apply to people who need to live in two houses e.g a business man may have a business in two Provinces and needs to live part of the year in one Province and part of the year in another Province.

The following are the rates of duty

Where the property is a residential property and the purchaser is a citizen and—
(i) neither he nor (if he is married) his spouse has previously owned a residential property in Papua New Guinea or elsewhere and he is purchasing the property for use solely as his or their (if he is married) principal residence—
Where the value does not exceed K210,000.00 Nil
Where the value exceeds K210,000.00 but does not exceed K280,000.00 2% of the value in excess of K210,000.00
Where the value exceeds K280,000.00 K1,400.00 + 5% of the Value in excess of K280,000.00
(ii) has previously owned a residential property either in Papua New Guinea or elsewhere and is purchasing the property for use solely as his or their (if he is married) principal residence—
Where the value does not exceed K210,000.00 2% of that value
Where the value exceeds K210,000.00 but does not exceed K280,000.00 K4,200.00 + 5% of the Value in excess of K210,000.00
(iii) is the owner of a residential property and is purchasing another residential property for use solely as his or their (if he is married) principal residence—
Where the value does not exceed K210,000.00 2% of that value
Where the value exceeds K210,000.00 but does not exceed K280,000.00 K4,200.00 + 5% of the Value in excess of K210,000.00
(iv) is the owner of more than one residential property and is purchasing another residential property
Stamp duty is calculated ******* (not provided in documents!!!***

“residential property”, for the purposes of this Item, includes any residential property of which a person has land use entitlement directly or indirectly under marketable security or other chose in action.

Exemptions

  • The Stamp Duties Act provides exemptions for certain organisations, that while separate entities from the Government, are deemed to be the Government e.g. The Public Museum and Art Gallery, University of PNG and Forest Authority
  • There are also concessions for companies that want to transfer assets within their group.
  • The mining and petroleum industry is given concessional treatment in that there are concessions for transfers of exploration licences and information where they are not transferred for profit, this to encourage mining and petroleum exploration in the country.
  • However the main concessions are for Charities buying property for charitable purposes and *people buying their house to live in. The IRC gives around K100,000 in stamp duty exemptions each month for people buying their first home.

Blanket Approvals to Affix Adhesive Duty Stamps

Over the years numerous approvals had been granted by the Internal Revenue Commission for the affixing of adhesive duty stamps to various kinds of instruments.

The legislative authority for this was provided by section 81 of the Stamp Duties Act for agreements or memoranda of agreements and section 70(4) in relation to transfers of marketable securities.

Unless approval had been given these instruments were lodged at the Stamp Duties Office for impress stamping.

As the stamp duty on agreements or memoranda of agreements has been abolished it is no longer cost effective for Post PNG Limited to sell adhesive duty stamps.

Therefore all blanket approvals to affix adhesive duty stamps obtained from Post PNG Limited were cancelled as of 1 February 2006.

Holders of such approvals now have to lodge their instruments at the Stamp Duties Office for assessment of duty, or alternatively apply to pay stamp duty on them under the section 10A return system.

The section 10A system provides for the payment of stamp duty on the basis of a monthly return. The dutiable instruments do not have to be submitted to the Stamp Duties Office but are entered on a register maintained by the person liable to duty.

Adhesive duty stamps have not been sold by Post PNG Limited as from 1 February 2006.

Contract Splitting

Section 16A of the Act prevents the splitting of contracts splitting. The purpose of the section is to basically ensure that the same duty is paid on transactions; even if clients do more than one contract or transfer. The section achieves this by adding together transactions that are really the same larger transaction or a series of transactions that are really the one transaction

For the contracts/transfers to be added together as one contract, the following factors need to be present:-

  • The contracts/transfers need to be between the same parties: or,
  • Between different parties, who are related persons (within the meaning of related persons contained in Section 78B); and,
  • The transactions must occur within 12 months of each other.

The law prevents people inappropriately splitting the sale of property into a series of steps so as to reduce stamp duty payable..

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