Corporate Tax
Companies registered in Ghana are required to pay corporate tax on the company’s annual profit. The current corporate tax rate is 25%.
Filing Process for Corporate Tax:
- Provisional Assessment: The company receives a provisional assessment of its tax liability based on its revenue, as determined by the Commissioner at the start of the financial year. The assessed amount is paid in four quarters of the year.
- Preparation of Financials: At the end of the financial year, the company prepares financial accounts (profit and loss account, balance sheet, and cash flow statement), which are audited and signed off by an auditor.
- Submission of Company Income Tax Return and Financial Statement: The company submits a Company Income Tax Return along with financial accounts to the GRA by April of the following year.
- Final Assessment: The GRA issues a final tax assessment based on submitted financial accounts, and any outstanding tax liabilities must be settled.
Personal Income Tax (P.I.T)
Individuals are required to pay Personal Income Tax on their chargeable income, which includes all income from employment, business, or investments, minus allowable deductions. Tax is applied using graduated rates, meaning higher income results in higher tax.
Filing Process for Personal Income Tax:
- Provisional Assessment: The taxpayer receives an initial estimate of their tax liability.
- Submitting an Income Tax Return: Taxpayers submit their income tax return no later than four months after the basis period ends.
- Final Assessment: The Commissioner assesses the taxpayer’s chargeable income and determines the tax payable. Any outstanding payments must be settled promptly.
Pay–As–You–Earn (PAYE)
Employers in Ghana must withhold income tax from employees’ wages and salaries and remit it to the Ghana Revenue Authority. PAYE is calculated based on graduated income tax rates.
Filing Process for PAYE:
- Employers deduct PAYE from employees’ salaries monthly.
- The accumulated PAYE is remitted to the GRA at the end of the month.
- Employers file monthly PAYE returns, including a schedule of employee details (names and Ghana card numbers) and amounts paid.
Consequences for Non-Compliance
Companies that fail to comply with tax filing obligations on time are subject to administrative penalties for the duration of non-compliance.
By understanding filing requirements, adhering to deadlines, and seeking legal assistance, companies can ensure compliance and avoid penalties.
Contact Information:
For more information on meeting regulatory requirements and ensuring compliance, please contact:
- Email: contact@olaryealaw.com
- Phone: +233 (0)201068192