RELIEF FROM DOUBLE TAXATION FOR FOREIGN INVESTORS AND EMPLOYEES WHERE APPLICABLE

Brief Description

Note 1: Ghana uses the instrumentality of Double Taxation Agreements (DTA) to rationalize the tax obligations of investors who come from global tax sourced jurisdictions with a view of saving the concerned investors from the incidence of double taxation by both their home governments and the host country. These DTAs are expected to enhance cross border trade and business activities between residents of the contracting states by avoiding double taxation and preventing fi scal/tax evasion. These DTAs cover income taxes, including gains from the realization of capital assets. Once ratifi ed by Parliament, the terms of the DTAs will become e ective. Ghana is committed to entering into DTAs with interested countries with the ultimate objective of freeing investment capital and thereby securing the investment capital from being eroded by the effects of taxation. Ghana has executed and Ratified DTAs (Between The Republic of Ghana and Other Countries) Other Country to the Agreement for the Avoidance of Double Taxation with: 1. Belgium : 17th October, 2008 2. Denmark: 10th November, 2015 3. France: 1st April, 1997 4. Germany: 14th December, 2007 5. Italy: 5th July, 2006 6. Netherlands: 12th November, 2008 7 . South Africa : 23rd April, 2007 8. Switzerland: 30th December, 2009 9. United Kingdom: 10th August, 1994 Ghana has also signed DTA with the underlisted four countries that will be in force in 2019. Morocco, Singapore, CZECH Republic and Mauritius

Criteria

1. For the purpose of determining the income of a person for a basis period accruing or derived from outside Ghana, the foreign income tax paid with respect to the income would be deducted. 2. Foreign Tax Credit: A resident person is entitled to a credit for a year of assessment for any foreign income tax paid by that person in respect of his foreign income for the year. 3. Foreign tax credits are calculated separately for taxable foreign income from each business, employment or investment. These foreign tax credits should not exceed the average rate of Ghanaian income tax of that person (for the year of assessment) applied to his taxable foreign income for the year from each business, employment or investment. 4. A person’s assessable income, for which that person is entitled to a foreign tax credit, would be increased by the amount of the foreign tax credit. 5. Where taxable foreign income of a person includes a dividend, tax would be deemed to have been paid. 6. Where a Double Taxation Agreement (exists), credit is to be granted for foreign income tax paid with respect to the profits from which the dividend is distributed. 7. A person may elect to relinquish a foreign tax credit with respect to the foreign income tax paid.

Awarding

Automatic subject to basic eligibility criteria

Institution

Ghana Revenue Authority

Implementing Institution

Ghana Revenue Authority