Effective January 01, 2023, Customs are responsible for calculating and collecting the PGST on exported goods and administering all matters concerning taxable exportations. This role includes ensuring that:

• PGST exemptions claimed by exporters are correct;
• The value of the taxable exportation is correctly calculated; and
• PGST payable on taxable exportations is paid to Customs.

In line with RPPL No.11-11, it states the following:

1212. Zero-rated supplies.

(a) Subject to this section, the following supplies are zero-rated supplies:

(1) a supply of goods that is an export of the goods;

(2) a supply of goods that are treated under the Customs legislation as stores for use or consumption outside the Republic on:

(A) an aircraft or ship going to a destination outside the Republic; or

(B) a fishing vessel going outside the Republic’s fishing waters;

(3) a supply of goods in the course of repairing, renovating, modifying, or treating goods that are temporarily imported under the Customs legislation if the first-mentioned goods:

(A) are brought into, affixed to, attached to, or otherwise form part of the temporarily imported goods; or

(B) are stores that become unusable or worthless as a direct result of being used in the repair, renovation, modification, or treatment process;

(4) a supply of services for use or consumption outside the Republic as evidenced by documentary proof acceptable to the Director;

(5) a supply of services directly in connection with goods that are temporarily imported under the Customs legislation;

(6) a supply of international transport services;

(7) a supply of telecommunications services if:

(A) the supply is made by a resident telecommunications supplier to a non-resident telecommunications supplier; or

(B) the person who initiates the supply as determined under Section 1234(1), including when the person initiates the supply on behalf of another person, does so while physically located outside the Republic;

(8) a supply of goods or services as part of the transfer of a business, or part of a business, as a going concern by a registered person to another registered person if:

(A) all the goods or services necessary for the continued operation of the business or part of the business are supplied to the transferee;

(B) the transferor carries on the business until the day of transfer;

(C) the transferee will not carry on the business to make exempt supplies and will not use the goods or services transferred for private use; and

(D) the transferor and transferee agree in writing, on or before the date of the transfer, that the transfer will be treated as a transfer of a business or part of a business as a going concern for the purposes of this chapter;

(9) a supply of prescription medicine made to a pharmacy, medical clinic, or hospital licensed to operate in the Republic;

(10) a supply of plastic pellets intended solely for use in the manufacture of bottled water in the Republic, provided that the supply is made to a manufacturer registered under Chapter 26 of this Title; and

(11) a supply of empty glass bottles or empty aluminum cans intended solely as containers for alcohol manufactured in the Republic, provided that the supply is made to a manufacturer registered under Chapter 26 of this Title.

(b) A supply of goods is an export of the goods if the goods are delivered to, or made available at, an address outside the Republic. For this purpose, the delivery of the goods to the owner, charterer, or operator of a ship or aircraft supplying international transport services for the purposes of carrying the goods outside of the Republic is, in the absence of proof to the contrary, sufficient evidence that the goods have been exported.

(c) A supply of goods is not a zero-rated supply under Subsection (a)(1) or (a)(2) if the goods have been or will be re-imported into the Republic.

Excise Tax

2612. Imposition of excise tax on imports of excisable goods.

The following goods are exempt from excise tax:

…..

(2) bona fide stores of a ship or aircraft, being goods for the use of passengers and crew of the ship or aircraft while on board and while the ship or aircraft is in international traffic in such quantities as approved by the Director;

(3) goods carried across the Republic in transit.

2614. Excisable goods and rates.

(d) The rate of excise tax on an export of excisable goods is zero percent (0%).

(e) Subject to Subsection (f), excisable goods are treated as exported if the goods are delivered to, or made available at, an address outside the Republic. For this purpose, the delivery of the goods to the owner, charterer, or operator of a ship or aircraft operating in international traffic for the purposes of carrying the goods outside the Republic is, in the absence of proof to the contrary, sufficient evidence that the goods have been exported.

(f) Excisable goods are not treated as exported if the goods have been, or will be, re-imported into the Republic.

Exempt Exports

The PGST is not added to the exports and for this reason, they are “zero rated”.

For more information, please click on this link to the Tax Reform Main Page: https://www.palaugov.pw/taxreform/pgst/