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Ghana

Overview

Section 16 of Ghana’s Value Added Tax Act, 2013 (Act 870) (VAT Act) requires non-resident persons who supply electronic commerce (e-commerce) or telecommunication services for use or enjoyment in Ghana, other than through a VAT-registered agent, to register for VAT if they make taxable supplies in excess of the general mandatory VAT registration threshold. The general mandatory VAT registration threshold is currently taxable supplies of GHS 200,000 (approximately USD 17,000) for a 12-month period or its quarterly equivalent.

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Release date: April 2024

Key provisions applicable to VAT on ESS

Table 1

Services in scope

 

The services in scope include telecommunications services, electronic commerce and digital services. These are further explained below.

Electronic commerce includes a business transaction, including a digital service, that takes place through the electronic transmission of data over a communication network such as the internet.

Digital services include:

  • Social networking
  • Online gaming
  • Cloud services
  • Video or audio streaming
  • Digital marketplace operations
  • Online advertisement services

Telecommunication services include services that relate to:

  • The transmission, emission or reception of signals
  • Writings, images and sounds of information of any nature by wire, radio, optical or other electromagnetic systems, including the provision of access, transmission, emission or reception
  • Political, social, cultural, artistic, sporting, scientific or entertainment broadcasts or events

 

Registration and compliance

Non-resident persons who supply electronic commerce or telecommunication services for use or enjoyment in Ghana, other than through a VAT-registered agent, are required to register for VAT if they make taxable supplies in excess of the general mandatory VAT registration threshold of GHS 200,000 (approximately USD 17,000) for a 12-month period or its quarterly equivalent.

Filing and payment of VAT are due on, or before the last working day of the month following the month the return relates to.

Invoicing

The non-resident supplier is required to provide its own system-generated tax invoice. The Revenue Authority is yet to roll out an electronic tax invoicing system for non-resident suppliers. 

A tax invoice should contain the following:

  • The name, address and tax identification number of that taxable person
  • The date and time of supply
  • The number of the invoice taken from a consecutive series
  • The name of the customer or business name and address and tax identification number if a taxable person
  • A description sufficient to identify the goods or services supplied including the quantity of the goods or the extent of the services supplied
  • The type of transaction by reference to the following categories:
    • Sale
    • Hire purchase, hire, lease or rental
    • Exchange
    • Goods and services supplied from the taxable person’s own supplies
  • The tax-exclusive charge for each description of goods or services supplied
  • The rate of the tax
  • The total charge on the invoice, exclusive of the tax
  • The rate of any discount
  • The total tax charged
  • The total charge inclusive of the tax

VAT on costs

Non-resident suppliers cannot recover (claim) VAT on costs incurred in the country. However, non-resident suppliers can recover the 7% withholding tax on VAT suffered.

Particulars

Description

Scope

Both B2B and B2C

Liability to remit VAT

Non-resident supplier 

VAT rate

VAT rate of 15%, National Health Insurance Levy (NHIL) of 2.5%, Ghana Education Trust Fund Levy (GETFL) of 2.5%  and COVID-19 Health Recovery Levy (CHRL) of 1%. 


The effective rate is 21.9%

Taxable value

The taxable value (for VAT purposes) of the supply includes the base value (cost) plus NHIL, GETFL and CHRL of 6%.

Effective date

April 2022

VAT registration threshold

GHS 200,000 (approximately USD 17,000) for a 12-month period or its quarterly equivalent

Tax invoice

The non-resident supplier is required to provide its own system-generated tax invoice. The Revenue Authority is yet to roll out an electronic invoicing system for non-resident suppliers.


Contact us

Abeku Gyan-Quansah

Abeku Gyan-Quansah

Director | Business School Leader, PwC Ghana

Tel: +233 (0) 30 276 1500

Alexander Yankson

Alexander Yankson

Senior Manager, Tax, PwC Ghana

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