Transfer pricing - Ghana

The first transfer pricing regulations in Ghana entered into force on 14 September 2012. Ghana introduced New Transfer Pricing regulations (i.e. TP Regulations, 2020), effective from November, 2020. These new regulations replace TP Regulations of 2012. TP Regulations 2020 intend to simplify its administration, reduce compliance burden on eligible taxpayers, and provide clarity on key technical terms. It also aligns the Ghana’s TP regime with the Base Erosion and Profit Shifting (‘BEPS’) initiative of the Organisation for Economic Co-operation and Development.

 

Apart from arm’s length pricing, the provisions in the income tax law provide for the application of formulary apportionment. The transfer pricing provision in the income tax law can be found in section 31 of the Income Tax Act, 2015 (Act 896), as amended (ITA). Section 31(5)(b) and (c) of the ITA provides that the Commissioner-General may, in carrying out an adjustment, recharacterize the source and type of any income, loss, amount or payment, and apportion and allocate expenditure, including the activities of a permanent establishment based on turnover.

 

Ghana is a signatory to the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information and Intended First Information Exchange Date, which allows Ghana to exchange information with 109 other countries.

A Pioneer Transfer Pricing Services provider in Ghana

Advisory & Litigation Support Solutions

We help design and implement Global TP Policy / review Agreements for Multinational Corporations. We also provide TP litigation support services.

Transfer Pricing Documentation Solutions

Transfer Pricing compliance requirements by delivering meticulously prepared Documentation as per Local TP Regulations and global standards.

TP Due Diligence / Health Check Services

We assist in identifying gaps by providing health check up from Legal, Corporate and TP documentation perspective.

Database

We have access to various public financial and company databases, industry and directories which assist us to render comprehensive TP analysis.

Transfer Pricing in Ghana

  • Under TP Regulations 2020 definition of “Documentation” to be maintained contemporaneously includes “Master File” in addition to “Local File”. This is a significant change from the erstwhile requirement under the old Regulations wherein only the “Local File” was required to be maintainence

  • Any company undertaking related party transactions should prepare the Master File. The Master File must be filed electronically as part of the contemporaneous documentation requirements

  • The Local File must be filed electronically as part of the contemporaneous documentation requirements. The Local File must be filed as part of the electronic documentation not later than 4 months after the end of each basis period.

    TP Regulations 2020, also provide an exception for preparation of documentation to taxpayers whose monetary value of the specific arrangement does not exceed the Ghana Cedi equivalent of USD Two Hundred Thousand ($200,000). In addition to the above, the safe harbor is also available in case the taxpayer is engaged in providing low value-adding intra-group services and the exemption for maintenance of TP documentation has been approved by the Commissioner General. Lastly, taxpayers may choose exemption from maintenance of TP documentation in cases where the taxpayer has undertaken controlled transactions post entering into a Technology Transfer Agreement which is registered with the Ghana Investment Promotion Centre and for which applicable rate (i.e. Royalties, Management or Technical/ Know how Fee) is less than 2% of the net profit.

  • Multinational enterprise groups are required to do the CbC reporting. Regulation 13(1) of the Regulation requires an ultimate parent entity of a multinational enterprise group that is resident for tax purposes in Ghana to file the CbC report. This, however, does not apply to MNE Groups with an annual consolidated revenue of less than Ghana Cedis 2.9 billion during the Fiscal Year immediately preceding the Reporting Fiscal as reflected in its consolidated financial statement for the preceding Fiscal Year.

    The CbC report is required to be filed not later than 12 months after the last day of the reporting fiscal year of the multinational enterprise group.

     

  • All persons who enter into transactions with persons with whom they are in a controlled relationship must file a return indicating the related-party transactions for the year. The taxpayer is required to file the form not later than 4 months after the end of the accounting year of the entity.

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Master File starting at

GHS 12,000

Local File starting at

GHS 26,000

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For further information on transfer pricing please contact:

Nathaniel Owusu Ansah [FCA]

Principal – Ghana Practice

Nathaniel is the managing partner of Assurancehub Consult (Chartered Accountant & Business Advisory). He is a Chartered Accountant and a member of Institute of Chartered Accountants (Ghana) and a member of Internal Auditors Ghana (IIA). Nathaniel is a chartered tax practitioner qualified with the Chartered Institute Taxation. He has consulted on the Ghana Revenue Authority Revenue Enhancement Transformation Project (Audit Factory) and expert in the Ghanaian tax laws. Nat has a wide range of experience in financial reporting, audit, and financial management and has undertaken a wide range of assignments including statutory audits, due diligence reviews, internal audit reviews, feasibility studies and project reviews for both local and international organisations.

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