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.
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:
Telecommunication services include services that relate to:
|
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:
|
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. |
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