All resident and nonresident companies must pay corporate income tax on income relating to business and investment, derived from, accrued, brought into, and received, in ghana. Every person carrying on petroleum operations shall, subject charge of to the provisior of this law, pay for each year of. Basics and definitions income tax act, 1961 background, concept and mechanism of income tax definitions, concept of income, previous year, assessment year, distinction between capital and revenue receipts and expenditure, residential status basis of charge and scope of total income 2. Nonresident individuals who earn income from ghana will therefore pay income tax at the rate of 25% on their gross taxable income. Ghana amendments to personal income tax system are enacted. The standard rate of corporate income tax is 25%, although rates vary according to the status of. Revised personal income tax rates and other tax law. Withholding tax rates in ghana 2018 ghanasummary news. Platforms for calculating paye, vatnhil and withholding taxes have been made available for free usage.
Wtsnobisfields is a corporate and commercial law firm in accra, ghana. Gifts received in respect of employment are required to be included. Passed by parliament and assented to by the president. The act provided new regulations on how income tax was to be imposed to ghanaians citizen. Abridged versions of the tax laws revised personal reliefs new tax rates effective 1 st january, 2020 relocation large taxpayer office lto registration of transport unions and haulage companies for the transit of goods cargo tracking note ctn compliance notice gra introduces ghana tax stamp authenticator appeal to volunteer. With respect to resident persons, the income must be derived from. Pkf ghana is a member firm of the pkf international limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.
Ghana tax rates for 20162017, 20152016, 20142015 ghana. Pdf ghanas tax reforms constitute the major policy instrument needed to. With respect to resident persons, the income must be derived from, accrued in, brought into or received in ghana. We provide you with various forms of tax laws including income tax act and its amendments. In accordance with the income tax act, 2015 act 896, any investment income and capital gains with ghanaian source are subject to tax in. Up to 30% of sales may be sold on the domestic market. States apply their jurisdiction to tax, based on varying combinations of income source and residence principles. Guidelines for tax compliance in ghana all you need to know. In ghana tax incentives classified under the following. End of service benefit therefore constitutes ones gain from employment and as such is subject to tax in ghana. Final income tax act, 2015 gnbcc ghana netherlands.
Where a nonresident person has a ghanaian permanent establishment pe, any income connected with the pe is assessed to tax. Exemption from income tax for the first 10 years, thereafter a maximum tax rate of 25%. We provide answers to frequently asked questions by individuals and businesses in relation to taxation. Gra practice notes to income tax act, 2015 act 896, ghana. Generally, income has a source in ghana if it accrues in or is derived from ghana. Pdf ghanas tax reforms constitute the major policy instrument needed to accelerate growth and poverty reduction. O n january 1, 2016, the much awaited income tax act 2015 act 896 which seeks to consolidate income tax laws and regulations which relate to financial institutions, insurance, mining, and petroleum came into force. Introduction economic growth increases the taxable capacity of a country and enables a larger share of the private sectors resources to be ceded to the government as taxes to provide public. The business and investment income of a nonresident person is included in the assessable income for a year of assessment if that income has a source in ghana. Income liable to tax in ghana, income tax is levied each year on the income of both resident and nonresident persons. Act 902 amends some provisions in act 896 the principal act. Ghana amends income tax act with certain tax exemptions.
Domestic tax revenue division dtrd of the ghana revenue authority gra and customs and excise duties administered by the customs division cd of the gra. For more information on the tax rates visit website. Resident persons are taxed on their worldwide income, while nonresident persons are taxed on income which has a source in ghana. Imposition of tax and ascertainment of chargeable income.
Part i imposition of income tax imposition of income tax 1. Income tax is levied in each year of assessment on the total income of both resident and nonresident persons in ghana. States apply their jurisdiction to tax, based on varying combinations. Ghana pkf assurance, audit, tax, advisory and business. Consolidate the laws relating to income tax simplify the income tax law provisions and make it user friendly address various forms of tax base erosions on employment income, gift tax and interest paid on residential mortgages 30 november 2015 global tax alert ghana enacts new income tax act ey global tax alert library. End of service benefit therefore constitutes ones gain from employment and as. Ghana has an extremely friendly income tax system which really benefits both low and middle income earners in ghana. The chartered institute of taxation ghana was incorporated on 10th august 2016, by the chartered institite of taxation act 2016, act 916 to promote the study of taxation and regulate the practice of taxation in ghana. It is intended to improve tax compliance and administration and broaden the countrys income tax base by rationalizing tax breaks. Objectives of income tax act, 2015act 896 to revise and consolidate the law relating to income tax simplify the provisions make tax more user friendly retain provisions that are peculiar to income tax administration enhance efficiency and facilitate compliance 23032016 presented by edward a. In 2001, a new tax law, the internal revenue act 2000 act 592, was passed to. Occupational and personal pensions scheme general regulations 2011, l. Revised personal income tax rates and other tax law amendments.
The government of ghana through its legislature has passed income tax laws which not only protect workers but also assure them some good saving and investment for their old age. Petroleuni income tax law, 1987 in pursuance of the provisional national defence council establishment proclamation, 1981 this law is hereby made. All companies have to file returns four months after their accounting year. Revisions to income tax law effective from 1 january 2019 do not. Public lecture institute of chartered accountants, ghana. Review of personal income tax rates tax update revised personal income tax rates and other tax law amendments january 2019 first next next next next exceeding 3,456 1,200 1,680 36,000 197,664 240,000 nil 5 10 17.
General provisions under the law pricewaterhousecoopers 2008 tax facts and figures 1 income liable to tax income tax is levied in each year of assessment on the total income of both resident and nonresident persons in ghana. Ghana afrobarometer survey 2012 opinions on the tax system a tax system consists of tax policy, tax laws and tax administration. Learn more from these guidelines which will help you comply with all tax requirements in ghana. Ghana enacts income tax amendments the income tax amendment act, 2015 act 902, was assented to by ghanas president and published in the official gazette on 30 december 2015.
The regulations, which came into force on 4 july 2016, amplify the provisions in the act. We assist individuals and businesses having taxrelated difficulties at no cost. Income tax act 2015 act 896 o n january 1, 2016, the much awaited income tax act 2015 act 896 which seeks to consolidate income tax laws and regulations which relate to financial institutions, insurance, mining, and petroleum came into force. However, the ghana income tax act provides that the gains on realisation of an asset arising out of a merger, amalgamation or reorganisation of a company is exempt from tax where there is continuity of at least 50% of the underlying ownership in the asset. Withholding tax on management and technical service fees. Ghanaian knowledge of their tax obligations to government percent source. In accordance with the income tax act, 2015 act 896 a persons income from an employment is all of that persons gains and profit from that employment unless it is specifically exempted by the tax laws. Ghana law firm and tax experts nobisfields ghana law firm. New income tax law from january 2016 graphic online. Income tax rates applicable to resident individuals are. Previously, income of an approved unit trust or mutual fund was taxed at 1% after the ten year tax holiday whereas the income of a reit was taxed at 25%. Following the passage of the income tax act, 2015, act 896 as amended the act in 2015, ghanas finance minister has issued the income tax regulations, 2016, l. Income tax act, 2015 8 act 896 act of the parliament of the republic of ghana entitled income tax act, 2015 an act to provide for the imposition of income tax and for related purposes. Gra launch new income tax act, 2015 act 896 modern ghana.
In most countries, the jurisdiction to tax is based on the domestic legislative process, which is an expression of national sovereignty. Consolidate the laws relating to income tax simplify the income tax law provisions and make it user friendly address various forms of tax base erosions on employment income, gift tax and interest paid on residential mortgages 30 november 2015 global tax alert. The ghana revenue authority gra will implement a new income tax law to replace the repealed internal revenue act, act 592 with effect from january 2016. The 2015 income tax act ghana law act 896 was amended in 19 february 2016. The deputy minister of finance, mona quartey, has officially launched the ghana revenue authority new income tax act, 2015 act 896, which seeks to facilitate and encourage voluntary compliance by tax payers with the countrys tax law. Imports of goods and services are exempt from taxes and duties. Preamble tax data card 2017 the kpmg tax data card provides a brief insight into the income tax act, 2015 act 896, including the subsequent amendments to the act. The proposed amendment to the tax law to compel institutions with taxfree status pay tax on income from commercial activities was not effected. Company tax unless specifically exempted in the law, companies both resident and nonresident are required to pay tax on income relating to business and investment derived from. Gift tax and capital gains tax have been abolished. Ghana amends income tax act with certain tax exemptions and. This indicates a shift from the sourcebased approach of taxing income to the worldwide income approach. Important changes which were made in the new income tax rates in ghana included the following.
We are regulated and authorised by the general legal council to provide legal services. This is the tax paid by companies on their profits in the year. Foreigners may hold a maximum of 100% of the shares of the company. The proposed amendment to the tax law to compel institutions with tax free status pay tax on income from commercial activities was not effected. Ghana individual income tax rate table and ghana corporate income tax tds vat table provides a view of individual income tax rates and corporate income tax rates in ghana. Home income tax service tax vat central excise online forms bare acts companies act cpc crpc ipc formats.
Income splitting is not permitted under the laws of ghana. It is important to note that, most of the taxes initiated in the 2017 budget statement which is to create a conducive business environment have been enacted into law. Withholding tax rates ghana withholding tax in ghana 2018 features some noticeable changes both in resident and non resident persons. The corporate entity is taxed separately from its share holders. We are a group of individuals from different industries and with expertise in ghana tax laws. Even though this move will enhance tax administration by ghana revenue authority, it also brought along a number of changes that. New tax rates effective 1 st january, 2020 relocation large taxpayer office lto registration of transport unions and haulage companies for the transit of goods cargo tracking note ctn compliance notice gra introduces ghana tax stamp authenticator appeal to volunteer information to gra appointment of value added tax withholding.
Gra practice notes to income tax act, 2015 act 896. In this article, we have detailed everything you need to know about tax registration, tax rates, tax incentives, withholding taxes, income taxes, monthly tax filings, and audits in ghana. In ghana, income tax is levied each year on the income of both resident and non resident persons. In this gms flash alert, we report on recent changes to ghanas personal income tax regime which include the introduction of a new top income tax rate. We assist individuals and businesses having tax related difficulties at no cost. Income tax act 2015 act 896 aitc international tax. Ghana amendments to personal income tax system are.
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