Ghana has a residence-based taxation system in terms of which residents are subject to tax on their world-wide income, whereas non-residents are subject to tax only on their Ghanaian-sourced income.
A company is resident in Ghana if it is incorporated under the laws of Ghana or it has its management and control exercised in Ghana at any time during the tax year.
corporate tax rate
Resident companies and permanent establishments of foreign companies are subject to corporate income tax at the rate of 25%.
Mining and petroleum companies are subject to a corporate tax rate of 35%, whereas Free Zone Enterprises are taxed at a rate of 15% after the concessionary period.
Companies engaged in non-traditional export, manufacturing, farming, agro-processing, hotels, waste processing, free-zones, rural banking, residential construction, unit trust schemes and venture capital financing qualify for reduced tax rates.
|capital gains tax (“CGT”)|
Capital gains arising on the disposal of assets are included in ordinary taxable income and subject to corporate income tax at the standard rate of 25%.
withholding tax (“WHT”) rates
WHT rate (%)
|branch profits|| N/A||8% |
|dividends||0% (if at least 25% voting right or free-zone investments, an approved unit trust scheme or mutual fund are exempt from tax.)|
| management, consulting and technical service fees|| 7.5% (for payments exceeding GHS2,000)|| 20%|
| || |
double tax agreements (“DTAs”)
DTAs are in place with Belgium, Denmark, France, Germany, Italy, the Netherlands, South Africa, Switzerland and the United Kingdom.
Losses may generally be carried forward for a period of three years, whereas, losses in a priority sector (farming, agro-processing, mining, petroleum, energy and power, tourism, ICTs and manufacturing) may be carried forward for a period of five years.
In terms of Ghana’s transfer pricing rules transactions entered into between persons who are in a controlled relationship, must be entered into on an arm’s length basis.
Persons are considered to be in a controlled relationship if an entity and a person who controls that entity or who may directly or indirectly, alone or together with other persons, benefit from 50% or more of the voting power or rights to the income or capital of the entity.
|thin capitalisation||In terms of Ghana’s thin capitalisation rules, the maximum accepted debt-to-equity ratio is 3:1 where 50% or more of the underlying ownership or control of a resident company (other than a financial institution) is held by a non-resident person. |
The income tax rates applicable to resident individuals with effect from 1 January 2018 are:
Resident employee tax rates applicable from 1 January 2016:
chargeable income (GHS)
|Up to 3,132|| 0%|
|3,973 - 5,172|| 10%|
|5,173 - 38,892|| 17.5%|
|above 38,892|| 25%|
Non-resident employees are subject to a flat rate tax of 25%.
Both employers and employees are obliged to contribute to the SSNIT.
The employer contribution rate to the mandatory pension schemes is 13%, whereas is the employee contribution rate is 5.5% of his/her monthly salary.
|payroll taxes||There is no payroll tax in Ghana.|
|stamp duty |
Stamp duty is levied under the Stamp Act on a wide range of instruments and documents at rates at rates ranging between 0.25% and 1% and GHS0.05i and GHS25, depending on the type of transaction and the instrument.
Stamp duty at a rate of between 0.25% and 1% is payable on the transfer of shares and immovable property, depending the value of the asset.
|taxable supplies ||VAT is levied on the supply of goods and services in Ghana, and on the importation of goods and taxable services.|
In terms of a July 2018 amendment, the National Health Insurance Levy (NHIL), previously collected as part of VAT, and the Ghana Education Trust (GET) Fund Levy of 2.5% each were consolidated and converted to a separate levy of 5%, to be known as the Health and Education Levy and administered separately.
A special VAT rate of 3% applies under the VAT flat rate scheme to registrable wholesalers and retailers, who is not entitled to an input tax deduction.
Any person who:
- has an annual taxable turnover / expected taxable turnover of GHS120,000, or
- at the end of any period of three months, made supplies exceeding GHS30 000 and there are reasonable grounds to expect that the total value of taxable supplies made during that period and to be made during the next consecutive nine months will exceed GHS120 000.
must register for VAT.
Businesses whose turnover is below the registration threshold may apply for voluntary registration, provided any other registration requirements are met.
|reverse VAT on imported services|
Resident companies are required to account for the output VAT in respect of imported services rendered by non-residents through a reverse-charge mechanism. Such a person may claim the amount paid as input tax on the service received, provided the services have been used to make taxable supplies.