Ghana has a residence-based taxation system.
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
The general corporate tax rate is 25%.
Mining and petroleum companies are subject to corporate tax at the rate of 35%.
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”)|
CGT is charged on gains accruing to, or derived by, a taxpayer from the realisation of an asset or liability at a rate of 15%.
withholding tax (“WHT”) rates
WHT rate (%)
|branch profits|| N/A||10% |
|dividends||0% (if at least 25% voting right)|
|interest||8% (except financial institutions)|
20% on government securities
|management, consulting and technical service fees||8% (except financial institutions)|
20% on government securities
| || |
double tax agreements (“DTAs”)
DTAs are in force with Belgium, Denmark, France, Germany, Italy, the Netherlands, South Africa, Switzerland and the United Kingdom.
Unrelieved losses from a business in a priority sector (eg, farming, agro-processing, mining, petroleum, energy and power, tourism, ICTs and manufacturing) may be carried forward for five years. Unrelieved losses in all other sectors may be carried forward for three years.
Transfer pricing rules are applicable in Ghana. Where an arrangement exists between persons who are in a controlled relationship, the income and tax payable thereby must be calculated according to the arm’s length standard.
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||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, and such resident company has a debt-to-equity ratio in excess of 3:1 at any time during a basis period, it will not be allowed to deduct any interest paid or foreign currency exchange loss incurred during that period on that part of the debt that exceeds the 3:1 ratio.|
Resident individuals are taxed on a sliding scale of between 0% and 25% and non-residents are subject to a flat rate tax of 20%.
Resident employee tax rates applicable from 1 January 2016:
annual chargeable income (GHS)
|up to 2 592|| 0%|
|2 592-3 888|| 5%|
|3 889-5 700|| 10%|
|5 701-38 880|| 17.5%|
|above 38 880|| 25%|
Both employers and employees are obliged to contribute to the SSNIT. The employee contributes 5.5% of his/her basic monthly salary, while the employer contributes 13% of the basic monthly salary.
Out of the total pension contribution of 18.5%, 13.5% will be remitted by the employer to the SSNIT on behalf of the employee and the remaining 5% will paid to, and managed by, a licensed pension trustee to be appointed by the employer.
|payroll taxes||There is no payroll tax in Ghana.|
|stamp duty |
Stamp duty is levied on a wide range of instruments and documents under the Stamp Act.
The person who makes, signs, issues or executes the instrument or document is liable to pay the duty. Exemptions from stamp duty include transfer of government stock or shares in a company, transfers of loan capital, bankruptcy and insolvency documents, and insurance policies.
|taxable supplies ||VAT is levied on the supply of goods and services made in Ghana, the importation of goods into Ghana and the taxable supply of any imported service.|
VAT is levied at a standard rate of 15%.
The NIHL at 2.5% is imposed under the NIHL Act, which is collected as part of VAT, resulting in an effective VAT rate of 17.5%.
A person who is engaged in a taxable activity and is not registered for VAT must register if:
- at the end of any period of 12 months or less, the person made during that period taxable supplies exceeding GHS120 000; or
- at the end of any month, there are reasonable grounds to expect that that person will make taxable supplies in the next 12 or less months exceeding GHS120 000; or
- at the end of any period of three months, the person made during that period supplies exceeding GHS30 000; and
- there are reasonable grounds to expect that the total value of taxable supplies made by that person during that period and to be made during the next consecutive nine months will exceed GHS120 000.
A person who is not required to be registered may apply voluntarily to be registered by the Commissioner-General.
|reverse VAT on imported services|
The recipient of imported services is liable to account for the output VAT on such service through a reverse-charge mechanism to the extent that the service is utilised or consumed in Ghana, other than to make taxable supplies. Such a person may not claim the VAT paid as input tax on the service received.