Cryptocurrencies are legal in Papua New Guinea but are not recognized as legal tender. The Bank of Papua New Guinea classifies them as property or virtual currency lacking legal tender status, meaning general tax principles apply to crypto assets rather than a specific regulatory framework. The Internal Revenue Commission (IRC) is the primary tax authority for cryptocurrencies, applying existing tax laws, notably the Income Tax Act. For individuals, income from cryptocurrencies, including capital gains, is subject to progressive personal income tax rates ranging from 0% to 42%. Capital gains realised from selling cryptocurrencies are taxed as ordinary income at progressive rates between 0% and 30%. There is no special tax treatment or reduced rates for long-term crypto holdings, all gains are taxed uniformly regardless of the holding period. Converting crypto to fiat currency is a taxable event, triggering capital gains. For corporations, a flat 30% corporate income tax rate applies to crypto-related income, with no specific rules for crypto. A 10% Goods and Services Tax (GST) may apply to crypto exchange services, but there is no dedicated crypto VAT. Specific crypto activities also have tax implications. Staking rewards are taxed as assessable income upon receipt, at individual progressive rates (0-42%). Cryptocurrency mining is treated as a business activity, individuals are taxed at 0-42% progressive rates, while corporate miners face a 30% flat rate, with costs being deductible. Decentralized Finance (DeFi) yields and transactions are generally taxable as income or capital gains, with each yield or transaction considered a potential taxable event without specific exemptions. Non-fungible tokens (NFTs) are considered property, and their sales are subject to capital gains taxation, treated as income. Moreover, crypto-to-crypto swaps are taxable events, treated as disposals under general rules.
Tax Rates
| Effective individual rate | 0 |
| Capital gains tax | 0-30% progressive rates applied as ordinary income |
| Income tax on crypto | 0-42% progressive personal income tax rates |
| Corporate tax | 30% flat rate, no crypto-specific treatment |
| VAT | 10% GST on crypto exchange services, no dedicated crypto VAT |
Activity Taxes
| Staking | Taxed as assessable income on receipt at 0-42% |
| Mining | Business income at 0-42% (individuals) or 30% (corporate), costs deductible |
| DeFi | Each yield/transaction taxable as income or capital gains, no exemptions |
| NFTs | Treated as property, sales subject to capital gains taxation as income |
Taxable Events
| Crypto → Fiat | Taxable, conversion triggers capital gains at progressive rates |
| Crypto → Crypto | Taxable, crypto-to-crypto swaps treated as disposals under general rules |
Holding Period
| Holding period benefit | None, no preferential rates for long-term holding |
Sources