Main rate: 25%
Resident companies are taxed on their worldwide income; non-resident companies are taxed only on Ghanaian-source income. A company is resident if it is incorporated under the laws of Ghana or if its management and control are exercised in Ghana. Companies listed on the Ghana stock exchange and companies in the hotel industry are subject to a 25% rate. Lower rates may apply to companies in the manufacturing or agricultural industries, depending on location. Free Zone companies and rural banks are exempt from corporate income tax for the first ten years; thereafter, they are subject to an 8% rate. Exporters of non-traditional goods are also taxed at 8%. Dividends paid to companies and individuals are subject to a 10% final withholding tax. A branch pays an additional 10% tax on its repatriated profits.
Progressive rates to 25%
Resident individuals are taxed on their worldwide income; non-residents are taxed only on income sourced in Ghana. Residents are subject to tax at progressive rates up to 25%, but non-residents are taxed at a flat rate of 20%. An individual is resident if a citizen of Ghana (except where the individual has a permanent home outside of Ghana); or if present for 183 days in any 12-month period beginning or ending in the tax year; or if absent temporarily for less than 365 days and where the individual has a permanent home in Ghana. Dividends received are taxed by withholding at 10%.
Capital gains tax of 10% applies to capital gains of companies and individuals.
VAT standard rate: 12.5% (plus national health insurance levy of 2.5%)
Value-added tax (VAT) applies to most transactions at the standard rate of 12.5%. Exports are zero-rated. Exemptions are provided for livestock, seeds, vegetables, agricultural inputs, financial services, education and medical services, domestic electricity, water and land, buildings and construction. Registration is compulsory for businesses with a taxable turnover of GHC 25m over a three-month period (GHC 100m in a 12-month period). Group registration is possible. A national health insurance levy (NHIL) of 2.5% is also imposed on imports and on supplies of goods and services, but the levy is not imposed on exports.
Tax Administration & Compliance
Tax year: Calendar year
A company must submit a tax return within four months after the end of the basis period ending within the tax year. Any person receiving income not subject to deduction of tax at source is required to make quarterly advance tax payments. Tax is withheld at source from employment income. Employees deriving income other than employment income must submit a tax return within three months after the end of the tax year.
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