Ghana

Publication
January 29, 2023

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.

Navigation

Key provisions applicable to VAT on ESS
Services in scope
Registration and compliance
Invoicing
VAT on costs

Download VAT ESS

Select another country

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.

Download publication VAT in Africa Digital Services

This report is a special edition of our annual VAT Guide in Africa, focusing on new rules and measures that have been introduced to tax the digital economy unilaterally by countries in Africa.

Previous publication