Preheat oven to 350°F and line baking sheets with parchment paper.
Whisk together flour, baking powder, and salt in a medium bowl. Set aside.
In a large bowl, beat butter and sugar until fluffy, about 3-4 minutes.
Add eggs one at a time, beating well after each addition. Mix in lime zest, lime juice, and coconut extract.
Gradually add flour mixture, mixing until just combined. Fold in shredded coconut.
Roll dough into 1-inch balls and place on prepared baking sheets, spacing 2 inches apart.
Bake for 12-14 minutes until edges are lightly golden. Cool on pan for 5 minutes, then transfer to wire rack.
Make the glaze by whisking together powdered sugar and lime juice until smooth and pourable.
Drizzle glaze over cooled cookies and immediately sprinkle with toasted coconut flakes.
Let glaze set for 15 minutes before serving or packaging.