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eCommerce Industry Media and Entertainment Information and Communication Technology Ghana Revenues Laws and Regulations Services Barriers

Ghana Digital Services

Ghana has extended its domestic value added tax (VAT) to non-resident digital services providers.

The Ghana Revenue Authority announced in April 2022 that it will begin collecting Value Added Taxes (VAT) from non-resident companies or persons that conduct business transactions in Ghana via the electronic transmission of data over communications networks like the internet.  

To quote from the Value Added Tax Act of 2013 (as amended), the measure is expected to affect persons and companies in the following lines of business:   

  • website supply; 
  • web-hosting;
  • distance maintenance of programs and equipment; 
  • images, text and information and making databases available; 
  • music and games, games of chance and gambling games; 
  • political, cultural artistic, sporting, scientific and entertainment broadcasts and events; and 
  • distance teaching. 

Generally, for companies or persons in Ghana’s domestic market, these same activities are subject to the VAT, as well. 

The rate of the VAT tax is 12.5% and is calculated on the value of the taxable supply of the goods or services.  Additionally, the National Health Insurance Levy (NHIL) 2.5%, Ghana Educational Trust Fund Levy (GETFL) 2.5%, and Covid 19 Health Recovery Levy (CHRL) 1% are applied.  The total tax liability is therefore 18.5%.  

The Ghana Revenue Authority has created a special portal for non-resident companies to formally register with the Commissioner-General and to remit VAT payments via money transfer, bank cards, etc. There are penalties and interest payable for: failing to register; incorrectly declaring VAT, NHIL, GETFL and CHRL; submitting returns late; late payments; and other infringements of VAT law. 

Companies located abroad are expected to collect VAT from their customers and then remit those fees to the Ghana Revenue Service.  According to the GRA portal, “The VAT and other levies must be filed and payment must be made not later than the last working day of the month immediately following the month to which the return relates, whether or not tax is payable for the tax period. (Section 52, Value Added Tax Act 2013, Act 870).”  

Thresholds of Application:

Non-resident companies should register to pay the VAT with the Ghana Revenue Authority if: 

At the end of any period of twelve or less months, the person made, during that period, taxable supplies exceeding one hundred and twenty thousand Ghana Cedis; or 

  •  at the end of any month, there are reasonable grounds to expect that that person will make taxable supplies in the next twelve or less months exceeding one hundred and twenty thousand Ghana Cedis. 

Additionally, they should register if: 

  • at the end of any period of three months, the person made, during that period, taxable supplies exceeding thirty thousand Ghana Cedis; and 
  • there are reasonable grounds to expect that the total value of taxable supplies made by that person during that period and to be made during the next consecutive nine months will exceed one hundred and twenty thousand Ghana Cedis.  

For more information on the digital services sector in Ghana, contact Victoria Agbai or Laurie Kelleher in the Commercial Section of U.S. Embassy Ghana at email: office.accra@trade.gov or Tel: +233(0)30-274-1870.   
 

08/22/2022