Daniel Nuer, Head of the Tax Policy Unit at the Ministry of Finance, Ghana, has revealed that the Ministry is set to introduce 36 additional Double Taxation Agreements (DTAs) to the current 14 in force.

Speaking during a UK-Ghana Chamber of Commerce (UKGCC) and PwC Ghana webinar on tax residency rules, Mr Nuer noted that six agreements are pending parliamentary ratification, while five others are being negotiated with Hungary, Israel, UAE, Korea, and Egypt. Five agreements have been concluded but await signing.

He also disclosed that three new DTAs are under discussion, and three older agreements are being renegotiated due to outdated models. Mr. Nuer emphasized the importance of these treaties in offering relief from double taxation, reducing tax rates, and providing exemptions for foreign airlines and shipping companies.

Understanding Tax Residency in Ghana

Tax residency plays a crucial role in determining a company’s tax obligations in Ghana. According to Michael Adu-Owusu of the Ghana Revenue Authority (GRA), a company incorporated under Ghana’s laws and managed within the country is subject to tax on global income. Additionally, a company may be taxed if deemed to have a Permanent Establishment (PE) in Ghana, meaning a non-resident entity engaged in business within the country.

Mr Adu-Owusu explained that determining tax obligations for companies operating in Ghana can be complex, especially when only liaison offices are set up. Companies are encouraged to consult the GRA to clarify their tax status.

Efforts to Harmonize International Tax Rules

Mr. Nuer further mentioned that the UN Model Convention on International Tax Cooperation is being revised to establish a framework for harmonizing DTAs across jurisdictions. This harmonization is expected to resolve discrepancies in tax rules for multinationals and streamline compliance with Ghana’s tax laws.

The UKGCC webinar also covered topics such as the payment of withholding taxes in non-resident cases, DTA tax rates, and how residency status affects tax obligations.

The UKGCC, established in 2016, aims to foster trade between the UK and Ghana and create more business opportunities for its members.