The Parliament of Ghana has passed new laws to help raise revenue to support the Government’s expenditure. The laws are the Covid-19 Health Recovery Levy Act, 2021 (Act 1068), Energy Sector Levies (Amendment) Act, 2021 (Act 899) and the Financial Sector Recovery Levy Act, 2021 (Act 1067).

The main purpose of these Acts is to increase Government’s revenue mobilization to support the Covid-19 expenditure, proper sanitation management, cost of excess power generation and outstanding cost of the financial sector clean-up. The Acts were assented to by the President of the Republic of Ghana on 31 March 2021. The Covid-19 Recovery Levy and the Energy Sector Levy will be in force from 1 May 2021.

In this Alert, we highlight the key aspects of the Acts below:

1.0 Covid-19 Health Recovery Levy Act, 2021, Act 1068
• There will be 1% levy chargeable on the supply of goods and services made in Ghana
other than exempt supply.
• The Act also imposes 1% levy on importation of goods and services other than exempt
imports.
1.1 Scope of the Covid-19 Health Recovery Levy
The levy is applicable on:
• The supply of goods that are subject to the Flat Rate Scheme of VAT.
• Suppliers that are subject to the Standard Rate Scheme of VAT.
1.2 Application of the Levy
The levy shall be applied:
• In the same way as the existing Ghana Education Trust Fund (GETFund) Levy and the
National Health Insurance Levy (NHIL) and
• Not allowable for input tax deduction.
2.0 Energy Sector Levies (Amendment) Act, 2021, Act 1064
• The Act imposes an Energy Sector Recovery Levy on some specified petroleum
products. That is, 20 Ghana pesewas per litre on Petrol and Diesel and 18 Ghana
pesewas per kg of Liquified Petroleum Gas.
• The Act also imposes a Sanitation and Pollution Levy of 10 Ghana pesewas per litre on
Petrol and Diesel.

Ghana passes the Revenue Administration (Amendment) Act, 2020, Act 1029 to amend the Revenue Administration Act, 2016, Act 915. The primary focus of the amendment is to provide for the establishment of an Independent Tax Appeals Board and other related matters. The Revenue Administration (Amendment) Act, 2020, Act 1029 was given assent by the President of the Republic of Ghana on 6 October 2020 and it came into force on the same day.

In this Alert, we will focus on Independent Tax Appeals Board as set out below:

Function of the Appeals Board

The Appeals Board is to hear and determine appeals against the ‘tax decisions’ of the Commissioner-General of the Ghana Revenue Authority (GRA) with respect to objections to tax decisions and assessments.

Composition of the Appeals Board

• The Appeals Board will be made up of:

1. A chairperson, who must be a Ghanaian lawyer of 10 years at the Bar with 10 years’ experience in tax practice or a retired Superior Court Judge.
2. Two retired officers of the Ghana Revenue Authority who had a rank of not below the Chief Revenue Officer or who qualify for appointment as tax consultants.
3. Two other persons with the same qualification as the chairperson.
4. Two representatives nominated by the Chartered Institute of Taxation, Ghana who have 10 years or more tax practice.
5. Two representatives nominated by the Institute of Chartered Accountants, Ghana who have 10 years or more practice.
6. Two representatives from the private sector who are women.

• The Appeals Board members shall be appointed by the Minister of Finance.
• The Appeal Board members shall have a tenure of four years and may be reappointed for another four years only.

 Panel

• The Chairman can constitute more than one panel to hear various appeals at a given time.
• A panel of three (3) members shall be deemed as a duly constituted Appeals Board.
• If a panel that does not have the Chairman as part of it, the Chairman shall appoint one of the members to preside as chairperson. The appointed chairperson must have similar qualifications as the Chairman.

 Mode of Business

• Appeals shall be heard in camera (only the parties and the appeal commissioners excluding the press and public).
• Parties can appear in person for a hearing or be represented by either a lawyer, registered tax consultant, accountant, or auditor.
• The Commissioner of the GRA may be represented by any duly authorised person.
• Evidence before the Appeals Board shall be given orally or by affidavit or as may be determined by the Appeals Board.
• Burden of proof lies on the Appellant (taxpayer).

Procedures of the Appeals Board

• A tax appeal against a decision of the Commissioner-General shall be filed with the Executive Secretary of the Appeals Board.
• The appeal against the Commissioner-General must be brought within thirty (30) days of the decision.
• The parties shall be invited to appear before the panel.
• The Appeals Board are not bound by rules of evidence.
• Experts may be invited by the Appeals Board to assist the panel in adjudicating a matter before it.

Decision of the Appeals Board

• Decision of the Appeals Board shall be delivered in writing.
• The decision shall be served on the parties within fourteen (14) days of the decision by the Executive Secretary of the Appeals Board.
• A party aggrieved by the decision of the Appeals Board shall mount an appeal at the High Court within thirty (30) days upon receipt of the decision.

On 19 April 2020, the President of the Republic of Ghana, Nana Addo Dankwa Akufo-Addo announced the lifting of the restrictions on the free movement of persons under the Imposition of Restrictions Act, 2020, Act 1012 effective 20 April 2020 at 1am. The Ghana Revenue Authority has put in place some measures to ensure that taxpayers are able to fulfil their tax obligations during this period of the Pandemic.

In this alert, we highlight the measures put in place by the GRA to flex the system and support taxpayers fulfil their tax obligations:

Extensions of due dates for filing of returns

• The due date of filing of company self-assessment returns which was originally due on 31 March 2020 has been extended to 30 April 2020.
• The due date for filing Company Income Tax (CIT) returns has been extended from four to six months after the end of the financial year. Thus, CIT returns that were due on 30 April 2020 have been extended to 30 June 2020.

Filing of Monthly returns

• Taxpayers are expected to file their monthly tax returns by the due dates as usual. The returns are to be filed using the email address of the taxpayers’ tax offices.
• All taxpayers are to contact their various offices for the email address.

Payment of taxes

• Payment of taxes are to be done by swift/direct transfer. Taxpayers are to contact their various tax offices for the bank details of the tax office.

Waivers

• Interest of outstanding tax liabilities have been waived by the GRA on the condition that the principal interest is paid by 30 June 2020.

Contributions and Donations to COVID-19

• Donations and contributions toward the fight against the COVID-19 Pandemic shall be allowed by the GRA as a deductible expense for the year 2020.

Vehicle Income Tax (VIT)

• The due date for sale of VIT stickers has been extended to 15 May 2020.

Takeaway

• It is important that taxpayers continue to meet their tax compliance obligations where no concession has been granted.
• It is important for taxpayers to note that none of the monthly tax obligations has been extended.
• Companies seeking to obtain Withholding tax exemption Certificate from the GRA are encouraged to file their returns as this may be used as a reason to deny granting the application.
• Taxpayers with cash flow constraint may apply to the GRA for an extension of time to pay the tax at an agreed later date. This application should be backed by economic proof in order to obtain the extension.

The Income Tax (Amendment) Act, 2020, Act 1017 was assented to by the President of the Republic of Ghana on 8 May 2020 and came into force on the same day. In this alert, we highlight the key amendments below:

• A withdrawal from a provident fund or personal pension scheme (before a person reaches the retirement age) by reason of the COVID-19 pandemic due to loss of permanent employment is exempt from income tax.
• A withdrawal by a self-employed person from the personal savings account managed by SSNIT because of the pandemic is also exempt from income tax

Takeaway

• This is a measure to cushion persons who lose their jobs by virtue of the COVID-19 pandemic.
• This applies to a person who has lost his permanent employment in the wake of the pandemic.
• The withdrawal from Tier 3 pension scheme by a person who has lost his employment shall not be subject to income tax.
• Persons in the informal sectors or self-employed persons can withdraw from their pension contribution personal savings accounts in light of the pandemic and there shall be no tax consequence. The reason for the withdrawal must be a result of loss of capital from business in the wake of the pandemic.
• Pension contribution is your future security, thus, withdrawal from your Tier 3 pension fund in view of the above should be done only when it is necessary.

The slogan of this year meeting was “BEPS 2.0 – paradigm shift in global taxation”

Topics discussed were:

• Future company structures and tax governance – How multinational companies react to the G-20, OECD and EU developments
• BEPS 2.0 – Impact on current business models and management of data
• How companies deal with ATAD and DAC6 compliance in the day to day business

For more information you may refer to the program in the following PDF:

Tax Directors Meeting

Australia is offering speedy credits on Goods & Services liabilities (Status: March)

Austria The deadline for the submission of the annual VAT return has been extendend to 31 August 2020. Moreover, the deferral and instalments of payments are possible on request. (Status: April)

Belarus The Belarusian government is not rushing with adopting measures to combat the Coronavirus: as of today, the borders are open, Belarus is not on lockdown, and not even an individual quarantine policy for educational establishments has been introduced.

Belgium Belgium has postponed the deadlines for VAT filing and payment of VAT. In addition, no VAT on donations of medical equipment to hospitals will be charged.

Brazil Postponement of the payment of the PIS and COFINS federal contributions and of the filing of ancillary federal tax obligations. Reduction to zero of the import duty and federal excise tax (IPI) rates on several products. Several Sates extended deadlines to comply with ancillary obligations related to the State-VAT (ICMS) and granted ICMS exemptions, taxable basis and rates reductions on transactions with hygiene, medical and pharmaceutical products. Many municipalities extended deadlines to comply with tax ancillary obligations and postponed deadlines to pay the Tax on Services (ISS) levied on determined services.

Canada will be providing federal tax reliefs from a new relief fund announced on 12 March. Details to follow. (Status: March)

China China offers VAT reliefs to combat COVID-19 impacts.

Colombia will provide delayed VAT payment terms for the first semester of 2020. (Status: March)

Costa Rica has provided a 3-month VAT payment deferment for taxpayers from 15th March. (Status: March)

Croatia The amended legislation has allowed taxpayers to defer payment of VAT until the moment of settlement of the invoices issued by the taxpayers. The prescribed deferral period is 3 months, with the possibility of extension to additional 3 months. (Status: April)

Cyprus A temporary suspension of the obligation to pay VAT is possible, if the VAT will be gradually paid by 11 November 2020. Eligible for companies whose turnovers are not more than EUR 1 million according to the tax return submitted in 2019 or where turnovers have been decreased by 25% due to COVID-19. (Status: April)

Czech Republic ‘The government of the Czech Republic allows following reliefs to combat COVID-19: Deferral of VAT payment upon request, waiver of interest on late payments and interest on the deferral of tax, waiver of the fine for late submission of tax returns, control reports and failures to submit control reports, waiver of administrative charges and exemption from VAT and customs duties on goods imported from third countries for the benefit of disaster victims. The government of the Czech Republic allows following allows following reliefs to combat COIV-19: Deferral of VAT payment upon request, waiver of interest on late payments and interest on the deferral of tax, waiver of the fine for late submission of tax returns, control reports and failures to submit control reports, waiver of administrative charges and exemption from VAT and customs duties on goods imported from third countries for the benefit of disaster victims.

Denmark The Danish Parliament is expected to implement a bill enabling small and medium sized businesses to apply for an interest-free loan equal to the amount of paid VAT in their latest VAT return submitted.

Estonia The Estonian Tax and Customs Board has suspended calculation of interest on tax debts from 1 March 2020 until 1 May 2020.

EU Commission has suggested countries provide VAT payment holidays, and act in unison. It has also relaxed the state-aid rules, which would permit VAT measures benefiting only specific businesses or sectors. (Status: March)

Finland The fee for late submission of the VAT return can be waived, if the taxpayer has a justified reason, e.g. illness. (Status: April)

France The French government does not allow deferral of payment or VAT reduction during the coronavirus crisis but temporarily relaxed VAT calculation and “paper” invoicing rules.

Georgia is doubling funding for company VAT credit refunds. (Status: March)

Germany has offered businesses affected by the Covid-19 outbreak the option to apply for delayed VAT payments (and other taxes) from 13 March 2020.

Greece Payments of VAT due between 11 March and 30 April are suspended until 31 August for specific enterprises. (Status: April)

Hungary The Hungarian Government appealed to the European Commission to exempt the import of medical equipment that are necessary to overcome the virus, such as face-masks and ventilators, from customs duties and VAT.

Ireland The application of interest on late payments is suspended for small and medium-sized enterprises for January, February, March and April 2020. (Status: April)

India has extended the timelimits for monthly GST filings for the periods March 2020 to May 2020 and the Annual Return and Audit for the FY 2018-19 until 30 June 2020. It has also delayed the implementation of new return filing system and E-invoice registration until 1 October 2020.

Indonesia has said it will waive 10% consumption taxes on hotels and restaurants in Bali and nine other tourist destinations for the next three months. It will also grant postponements of payments of import VAT for businesses, and offer accelerated VAT credit repayments for manufacturers. (Status: March)

Italy has implemented further deferment of VAT payments and VAT fulfillments deadlines regarding April and May.

Jamaica plans to cut its General Consumption Tax from 16.5% to 15%. (Status: March)

Japan is considering a temporary Consumption Tax rate reduction from 10% to 5%. It has already delayed filing deadlines and payments by one month until April. (Status: March)

Latvia To support businesses during the coronavirus outbreak Latvia has introduced new VAT measures to speed up the procedure for refunding overpaid VAT.

Lithuania The State Tax Inspectorate (STI) could be asked to extend the payment term for Corporate Income Tax, VAT, Personal Income Tax and other taxes administered by the STI.

Luxembourg: A failure in filing VAT returns will not be subject to fines. This measure applies until otherwise indicated by the government. (Status: April)

Malaysia Malaysia has extended the period for submission and payment of SST returns for taxable periods ending in February and March respectively. Submission for both taxable periods are due on 30th April, while payments are given extension until 13th May. (Status: April)

Malta announced 14 March a VAT payment holiday for businesses and self-employed for March and April. VAT credit refunds will also be accelerated. (Status: March)

Netherlands Deferral of VAT payments for a period of three months upon request. (Status: April)

Poland The deadline to file SAF-T returns is postponed until 1 July 2020. (Status: April)

Philippines The Philippines’ tax authority, i.e., Bureau of Internal Revenue, extended the filing and payment of the monthly and quarterly VAT returns. (Status: March)

Portugal Portugal suspends until 30 June 2020 all tax enforcement procedures in progress or initiated within that period. Moreover, Portugal exempts donations of goods used to fight the pandemic (e.g., medical or protective equipment) from VAT under certain conditions.

Romania No interest and penalties for late payment are computed for unpaid taxes (including VAT) with a due date / payment date starting with 21.03.2020 and 30 days after the closure of the state of emergency. Additionally, the enforced collection of taxes is suspended / does not start during the state of emergency and 30 days after the closure of the state of emergency. (Status: March)

Serbia VAT is not calculated and paid for the sale of goods or services performed free of charge by the VAT taxpayer to the Ministry of Health, the Republican Health Insurance Fund or a health institution in the public domain, and the VAT payer is entitled to deduct the previous tax on the basis of that turnover. (Status: March)

Singapore GST will remain at 7 per cent for the time being. Furthermore, the GST rate will not be raised in 2021. The government announced a GST voucher for all eligible households living in Singapore public housing. GST will remain at 7 per cent for the time being. Furtermore, the GST rate will not be raised in 2021. The government announced a GST voucher for all eligible households living in Singapore public housing.

Slovakia The VAT due won’t be considered as an outstanding payment and there won’t be levied any penalties in connection with the VAT due, if the VAT due will be paid till the end of the month following the month in that the emergency state in Slovakia was called off. (Status: March)

Spain From the 22nd of April to the 31st of July 2020, the VAT-tax rate applicable to supply of goods, imports and intra-community acquisitions of goods to fight against COVID-19 (included in the Annex of the Royal Decree-law 15/2020) whose recipient is a public-law entity, a clinic or hospital center or social-nature entities, will be 0%. Tax returns whose period of submission is from April 15th to May 20th have been extended until May 20th, 2020.

South Korea has cut VAT taxes for small businesses, given tax boosts for consumers replacing their cars early, and provided tax deductions on personal credit card spend. (Status: March)

Sweden A defereral of VAT payments can be granted for up to a year. (Status: April)

Thailand has exempted face masks from import VAT and reduced time waiting for VAT refunds to 15 days. (Status: March)

Turkey Deferral of April, May and June payments of the withholding, VAT withholding and Social Security Institution (SSI) premiums for the tax payers who are engaged in specific field of activities. (Status: April)

UK The UK Government is allowing all UK VAT registered businesses to defer any VAT payments arising during 20 March 2020 to 30 June 2020 until 31 March 2021 without incurring penalties or interest. VAT returns should be completed and submitted as normal.

US California suspends for 60 days interest on late sales tax remittances due to effects of virus or complying with health requirements. (Status: March)

Vietnam Vietnam is granting extensions on timelines for tax payments of VAT, CIT and PIT and for finalizations of PIT.

• According to French law, a EU parent company not resident in France is liable to pay withholding tax on dividends unless two conditions are fulfilled: (i) a formal undertaking to maintain a minimum participation of 10% and (ii) the appointment of a representative
• In the opinion of the Administrative Court, the difference of treatment between resident and non-resident entities constitutes a restriction on the freedom of establishment within the EU

• Analysis from a holistic, transactional and overarching perspective
• Our experts discuss different opportunities for Transfer Pricing
• We provide you with our comprehensive Covid-19 & TP framework

Webinar presentation

Covid-19 TP Response Framework

Template to make addendum to existing intragroup agreements

We are happy to schedule an online meeting to discuss your specific case. Please free to contact our WTS Global transfer pricing specialists.

• What tax measures have been taken worldwide on COVID-19? Where are opportunities on effective management of the implications?
• Summaries on Latin America, Asia Pacific and Europe
• Organized in a country by country perspective