20 Jul Double Taxation in Ghana: Insights for Investors and Multinational Enterprises Introduction
Foreign investments play a key role in the economic growth and development of countries across the world. It serves as a catalyst for capital formation, job creation, technology transfer, and infrastructural development. However, investors are often reluctant to invest in jurisdictions where the tax regime is overly burdensome and unpredictable, as this can increase the cost of doing business. To address these concerns and enhance its attractiveness as an investment destination, Ghana has adopted measures to mitigate the effects of double taxation, including the negotiation and execution of Double Taxation Agreements (DTAs).
This article provides an overview of Ghana’s double taxation regime, with particular emphasis on the role of DTAs in mitigating double taxation. It also highlights key considerations for Multinational Enterprises (MNEs) and cross-border investors seeking to invest in Ghana.
Understanding Double Taxation and the Role of DTAs
Countries generally assert their taxing rights based on various connecting factors such as a taxpayer’s residence, domicile, the source of income, or the place of effective management. As a result, the same income derived by a taxpayer may be subject to tax in more than one jurisdiction during the same or comparable periods. This situation is commonly referred to as double taxation.
For instance, Ghana taxes its residents on their worldwide income, including foreign-sourced income.[1] Similarly, non-residents are subject to tax in Ghana on income sourced within the country, notwithstanding that such income may also be taxable in their country of residence.[2] This overlap in taxing rights may cause the same income to be taxed in multiple jurisdictions, thereby increasing the overall tax burden on taxpayers engaged in cross-border activities.
To mitigate the effects of double taxation, Ghana currently has fourteen (14) DTAs in force with countries such as Morocco, the Netherlands, Mauritius, Germany, and the United Kingdom.[3] Under these agreements, the contracting states allocate taxing rights between themselves through mechanisms such as tax credits.
Beyond eliminating double taxation, DTAs offer a range of additional benefits, including access to the Mutual Agreement Procedure (MAP) for the resolution of cross-border tax disputes and protection against discriminatory tax treatment. Furthermore, in light of the differences in domestic tax laws across jurisdictions, DTAs provide greater certainty regarding the tax treatment of cross-border transactions. This enables taxpayers, particularly MNEs, to structure their affairs more effectively and determine with greater certainty the jurisdictions in which their income will be taxed.
How DTAs Provide Relief from Double Taxation
A DTA will typically specify the taxes covered, the available treaty benefits and methods for the elimination of double taxation. The provisions on the elimination of double taxation contained in Ghana’s DTAs permit a resident of Ghana to claim tax credits for foreign income tax paid in a contracting state against a similar tax payable in Ghana in respect of the same income.[4] Thus, the amount of foreign tax paid is deductible from the tax payable in Ghana. This is reinforced by Section 112 of the Income Tax Act, 2015 (Act 896), as amended (“Ghana’s Income Tax Act”).
Depending on the taxpayer’s average Ghanaian income tax rate for the relevant year of assessment, the tax credit may either reduce or fully eliminate the Ghanaian tax liability on the relevant income.[5]
Claiming DTA Benefits in Ghana: Eligibility and Procedure
A taxpayer seeking to benefit from the provisions of a DTA between Ghana and another country must satisfy certain requirements. First, the taxpayer must be a resident of either Ghana, the treaty partner state, or both Ghana and the treaty partner. In addition, the taxpayer must be the beneficial owner of the income in question and, where applicable, must satisfy any Limitation of Benefits or Entitlement to Benefits provisions contained in the relevant DTA.[6]
Further to the above, the taxpayer must also meet the following conditions:
- The taxpayer must be liable to tax in the treaty country of which that taxpayer is a resident.
- The income in question must not be exempted from tax in Ghana.
- The tax in question must be covered by the DTA.
- The benefit must not be specifically excluded under the DTА.
- The benefit must be claimed within the time stipulated by the treaty or domestic laws.[7]
To claim a tax credit relief, the taxpayer must submit to the Commissioner General of the Ghana Revenue Authority (GRA) a tax credit certificate, an official receipt or a functional equivalent of a tax credit certificate from the tax authority of the foreign country, specifying the nature of income and the quantum of taxes deducted or paid by the taxpayer.[8]
It is important to note that time is of the essence when claiming foreign tax credits. A taxpayer shall only be entitled to a credit for foreign taxes paid only in the year of assessment in which the income to which those taxes relate is assessed to tax in Ghana.[9]
Key Considerations for Multinational Enterprises
As Ghana continues to strengthen its tax framework, MNEs must remain attentive to evolving tax obligations. This is particularly important in light of the government’s indication in the 2026 Budget Statement and Economic Policy of its intention to ensure the effective taxation of non-resident entities with a significant digital or economic presence in Ghana.[10]
Accordingly, MNEs should carefully evaluate issues relating to tax residence and periodically review their corporate structures, financing arrangements, and intra-group arrangements to ensure compliance with both Ghana’s domestic tax laws and the provisions of applicable DTAs. MNEs should also be mindful that treaty benefits may be denied where a taxpayer’s residence, structure, or arrangement is established primarily to obtain treaty advantages without a genuine economic substance. Such treaty-shopping arrangements may result in the denial of treaty relief, additional tax assessments, interests, and penalties.
Finally, businesses should maintain comprehensive records of foreign taxes paid and ensure that claims for foreign tax credits are submitted within the prescribed statutory timelines to avoid the loss of available relief.
In conclusion, Ghana’s network of DTAs presents valuable opportunities to reduce tax costs and enhance certainty in the tax treatment of cross-border transactions. By adopting proactive tax planning strategies, carefully assessing their eligibility for treaty benefits, and maintaining adequate documentation, MNEs and investors can optimize the tax efficiency of their cross-border investments while ensuring compliance with applicable laws.
Author:
Jennifer Melody Fynn Asiam
Legal Associate
[1] Income Tax Act, 2015 (Act 896) (As Amended), Section 111(1)
[2] Ibid, Section 3(2)(b)(ii)
[3] Ghana Revenue Authority: ‘Status of Ghana’s Double Taxation Agreements’, also available at < https://gra.gov.gh/wp-content/uploads/2023/06/updated_GHANAS-DTAS-AND-STATUS-06_06_2023-UPDATED.pdf> Last accessed on 29th June 2026
[4] Agreement Between the Federal Republic of Germany and The Republic of Ghana for the Avoidance of Double Taxation and The Prevention of Fiscal Evasion with Respect to Taxes On Income, On Capital and on Capital Gains (2008), Article 24; Agreement Between the Government of the Republic of Ghana and the Government of the State of Qatar for the Avoidance of Double Taxation and The Prevention of Fiscal Evasion with Respect to Taxes On Income (2024), Article 23
[5] Income Tax Act, 2015 (Act 896) (As Amended), Section 112(2)(b)
[6] Practice Note on Obtaining Double Taxation Relief under the Income Tax Act, 2015 (Act 896) [GRA/AG/2024/002], Paragraph 6.1
[7] Ibid, Paragraph 6.2
[8] Income Tax Regulations, 2016 (L.I. 2244), Regulation 34(2)
[9] Ibid, Regulation 34(1)
[10] Budget Statement and Economic Policy for the 2026 Financial Year Paragraph 810