Everything you need to know about tax registration, tax rates, tax incentives, withholding taxes, income taxes, monthly tax filings, and audits in Ghana. Learn more from these guidelines which will help you comply with all tax requirements in Ghana.
Tax registration
All businesses are required to register with the Ghana Revenue Authority (GRA).
Businesses which are exempt from corporate tax are still required to register their business with the GRA for the purposes of payment of income tax.
All businesses registering with the GRA, must do so at the nearest GRA district office closest to the project location.
To register your company with the GRA, the following documents are required;
Completed corporate tax registration forms
VAT registration forms
Resume of all directors of the company
Pictorial delineation of the project/office location
A provisional tax assessment is raised on all businesses yearly, including new business registrations.
For new business tax registration, provisional tax assessment is determined by the GRA office in consideration of the objects of the business, stated capital and the nationality of the shareholders.
All companies liable for tax in Ghana, are required to pay provisional tax quarterly.
Tax Rates and Incentives
In Ghana the applicable taxes are;
Corporate tax – 25%
VAT and NHIL – 17.5%
VAT Flat Rate Scheme (VFRS) – 3%
Capital gains tax -15%
Dividend tax – 25%
Annual income tax rates – Find below
Chargeable Income (GH¢)
Rate (%)
Tax (GH¢)
Cumulative Chargeable Income (GH¢)
Cumulative Tax (GH¢)
First 2,592
Free
NIL
2,592.00
NIL
Next 1,296
5
64.80
3,888.00
64.80
Next 1,812
10
181.20
5,700.00
246.00
Next 33,180
17.5
5,806.50
38,880.00
6,052.50
Exceeding 38,880
25%
Monthly income tax rates –Find below
Chargeable Income (GH¢)
Rate (%)
Tax (GH¢)
Cumulative Chargeable Income (GH¢)
Cumulative Tax (GH¢)
First 216
NIL
NIL
216
NIL
Next 108
5
5.40
324
5.40
Next 151
10
15.10
475
20.50
Next 2,765
17.5
483.88
3240
504.38
Exceeding 3,240
25%
The following tax incentives (tax holidays and tax rebates) are available under the law;
Tax Rates
Percentage (%)
General Corporate Tax
25%
Companies Listed on the GSE
22%
Free Zone Enterprises
8% (After 10 year Tax Holiday)
Manufacturing Companies
25%
Companies Engaged in Non-Traditional Exports
8%
Companies Producing Cocoa By-Products
25%
Agro-Processing Companies
25% (after 1% for the 1St 5 years)
Venture Capital Financing Company
25% (after 1% for the 1St 10 years)
Unit Trust Scheme and Mutual Fund
25% (after 1% for the 1St 10 years)
Waste Processing
25% (after 1% for the 1St 10 years)
Companies Engaged in Non-Traditional Exports
8%
Withholding taxes in Ghana
The following incomes are subject to withholding tax at the rates specified in the table below;
Income
Rate (%)
Comments
Interest paid to Individual
1
On Account
Fees, allowance to resident director/manager, board member, trustee
20
On Account
Fees to lecturers, invigilators, examiners, part-time teachers, non-executive directors/board members and endorsement fees
10
Final
Commissions to insurance agents, sales and persons
10
On account
Commissions to resident lotto receivers or agents
10
On account
Supply of goods exceeding GH₵ 2,000 p.a
3
On account
Supply of works
5
On account
Supply of services
7.5
On account
Lottery winnings
5
Final
Payment to petroleum subcontractor
15
Final
Payment for unprocessed precious minerals
10
On account
Rent on Properties i.e Payment to an individual. Non –Business · Residential · Non -Residential
8 15
Final Final
Rent on Properties i.e Payment to persons other than individual Business Income -Residential -Non –Residential Non-Business Income -Residential -Non-Residential
8 15 8 15
On Account On Account Final Final
Royalty, natural resource payment
15
On account
Interest or dividend paid to a member or a holder of an approved unit trust or mutual fund
1
Final
Interest or dividend paid or credited to a person on a qualifying investment in a qualifying venture capital financing company for the first 10 years
1
Final
The threshold for withholding tax for the supply of goods, works and services have been increased from GH₵500 to GH₵2,000.
Tax filings
All companies are required to file their monthly and annual tax returns.
VAT – 30thof the month
Income tax (PAYE) – 15thof the month
Withholding tax – 15thof the month
Annual audited financial statement – not late than 31stMay of the year.
The penalty for late filing of tax returns are:
VAT – After the last working day you will pay Gh₵500. Any additional day is Gh₵10.
Withholding tax – After 15th you pay Gh₵500. Any additional day is Gh₵10
Income tax – After each quarter (March, June, September, December) you pay Gh₵500. Any additional day is Gh₵ 10.
Annual financial statements – After last working day of April, you will pay Gh₵500. Any additional day is Gh₵10.
Tax audits
The GRA may from time to time initiate a company audit
In an audit, the company will be required to supply relevant company source documents including the following;
VAT invoice books
Copy of VAT monthly filings
Bank statement
PAYE receipts
Cashbook
Sales books
Copies of payment receipts for general and operational expenses
Custom import documents as evidence for importation
Asset register
Trial balance
During an audit, the tax officers typically assess whether the source documents agree with the audited financial statement that has been submitted to the GRA. Specifically;
VAT invoices must agree with the Monthly VAT filings
Monthly VAT filings must agree with the reported Annual turnover figure in the financial statement
The annual turnover figure must correspond with the company’s sales book and bank statement sales deposits.
The expenses in the Profit and Loss statement must be traced to the cash book, with supported payment receipts accordingly
The salaries and wages figure in the Profit and Loss tally with the PAYE filings
All acquisitions of new assets must be evidenced by appropriate receipts and the asset register and shown on the balance sheet as well.