Preheat oven to 350°F (175°C) and line a 12-cup muffin tin with cupcake liners.
In a bowl, whisk flour, baking powder, baking soda, and salt; set aside.
In another large bowl, beat eggs, sugar, oil, lime zest, and lime juice until smooth.
Add coconut extract and coconut milk, mixing until fully combined.
Gradually add dry ingredients to the wet mixture, stirring until just incorporated.
Divide batter evenly among cupcake liners, filling each about ⅔ full.
Bake for 18–20 minutes or until a toothpick inserted in the center comes out clean.
Cool cupcakes completely before frosting.
For the frosting, beat cream cheese and butter until creamy and smooth.
Mix in coconut extract, then gradually add powdered sugar until fluffy.
Frost the cooled cupcakes and top with toasted coconut flakes and lime slices.