International VAT Guides – Ghana

VAT rates in Ghana 

How much is VAT in Ghana? 

The VAT Ghana Act explains that, unlike many countries, there is just one standard VAT rate of 15% in circulation. Supplies of goods and services could be exempt from VAT; however, there aren’t reduced rates in circulation.

It should be noted that taxable persons should calculate other levies for their transactions besides Ghana VAT. The supplier is obliged to add the following types of levies to the taxable amount of transactions: the National Health Insurance Levy (NHIL), the Ghana Education Trust Fund (GETFund), and the COVID-19 Health Recovery Levy (COVID-19 HRL).

The VAT Ghana Act indicates in what cases and under what conditions the supplies can be treated as exempt.

Ghana’s VAT tax landscape specifically calculates VAT and other levies imposed on most taxable transactions. In addition to the VAT rate, the registered supplier(domestic or foreign) must include the other three types of levies. 

Important notice is that these three different types of levies are calculated separately on the taxable amount, and the VAT is imposed based on that amount that resulted after imposing all levies. 

There are three different values of the levies that are imposed separately on the taxable amount:  

• National Health Insurance Levy (NHIL) = 2.5%;
• Ghana Education Trust Fund (GETFund) = 2.5%;
• COVID-19 Health Recovery Levy (COVID-19 HRL) = 1%.

VAT threshold in Ghana 

The VAT Act and related Practice Notes define the types of thresholds and under what conditions taxable persons can leverage them. The Commissioner-General provides up-to-date explanations concerning any relevant VAT changes, e.g., VAT threshold, through Practice Notes or other types of legislation. 

VAT registration threshold for resident businesses: Threshold of GHS 120 000 in the period of any 12 consecutive months.

VAT registration threshold for non-resident businesses: In most cases, non-resident businesses with establishments in Ghana cannot profit from the general threshold.

VAT registration threshold for foreign providers of digital services: Threshold of GHS 120 000 in the period of any 12 consecutive months or GHS 30 000 in three months.

VAT Taxable Activities in Ghana

Types of taxable activities that mandate the VAT registration:

• Supply of goods and services for consideration;
• Exports;
• Imports of goods and services;
• Supply of digital services.

Tax Representative in Ghana 

In many cases, nonresident providers of digital services can perform their VAT duties independently without needing to appoint a local VAT agent. However, considering different levies imposed on taxable services supplies and e-invoicing obligations, it’s often advisable to appoint a tax representative to ease the compliance process. 

Tax registration 

Standard Registration 

Domestic and foreign businesses with a place of business in the country should follow the steps designed by the Commissioner General’s guidelines in the practice notes for standard registration. The application should be submitted within thirty days from the start of the following reporting period. 

Simplified tax registration 

Non-resident supplies for e-commerce activities should be registered using the simplified tax registration scheme. The application should be submitted within thirty days from the starting date of the following reporting period. 

The registration is handled online, using the services of the Ghana Revenue Authority. 

VAT on Electronically Supplied Services in Ghana 

Digital Services

Foreign providers of digital services are obliged to register for Ghana VAT when they reach the threshold using the simplified registration form. They are also obliged to charge, collect, and remit tax payable to the Ghana Revenue Authority within the prescribed period and make a payment in the indicated manner. 

Non-resident suppliers of digital services should charge VAT for both B2C and B2B transactions. 

How much is VAT in Ghana for Electronically Supplied Services?

VAT rate Ghana: The Ghana VAT rate for the supply of digital goods and services is usually 15%. 

Invoicing Rules

Ghana is among the countries that have mandated using an e-invoicing system for both B2C and B2B transactions. The use of a certified software solution is mandatory. Foreign providers of digital services are obliged to adhere to the e-invoicing requirements if the conditions are met, or they can issue a sales receipt instead of an e-invoice.

The VAT Act defines the mandatory content of the e-invoice, and it has been updated a few times in the last few years. As previously mentioned, using the e-invoice for B2B transactions when the recipient is Ghana’s taxable person is, per law, mandated to be used. However, it was a work in progress concerning establishing the technical infrastructure for this kind of sales, and it should be duly analyzed before trying to adhere to the system or commencing the B2B supplies. 

The Commissioner General may allow the non-resident digital services supplier to issue sales receipts to their customers based in Ghana. 

Invoice Requirements in Ghana 

The tax invoice should at least contain the following:

General information: 

• Date of invoice issuance; 
• Date and time of supply;
• Unique invoice number from consecutive series.

Seller information:

• Company name;
• Full address(head office);
• Billing address if different from company address;
•  VAT number.

Customer information:

• Name;
• Full address;
• VAT number(if applicable).

Fiscal Information:

• Tax amount for each type of goods or services supplied;
• The Tax Rate;
• Type of the transaction by reference to the categories indicated in the VAT Act;
• the rate and corresponding amount of levies( NHIL, GETFund Levy and Covid-19 HRL);
• Total tax amount; 
• Invoice Total tax exclusive;
• Rate of any discount;
• Total invoice amount.

In addition to the issuance of the e-invoice, the following information should be added: 

• QR Code;
• Invoice signature;
• The verification code of the invoicing system;
• Encrypted Data;
• Timestamp. 

Foreign Currency Invoice in Ghana  

In most cases, the invoice should be issued in national currency. When it’s permitted to be issued in foreign currency, the VAT, total, and price of goods/services must be in local currency.  

Reporting is done in local or foreign currency. 

VAT Return in Ghana 

Standard Return 

The VAT-registered person should submit the return by the last working day of the month following the end of the reporting period. The reporting period is a calendar month. 

The tax payable should be paid within the prescribed period for the return submission.

Simplified Return 

Non-resident providers of digital services should submit the simplified return by the last working day of the month following the reporting period. If any tax is payable, it should be paid within the prescribed time to submit the return. 

VAT Ghana Simplified return

Penalties for late reporting and omitted declarations 

The VAT Act and Tax Procedures Act are the main points of reference regarding the definition of non-compliant behavior concerning the VAT framework. 

Fines and penalties according to VAT Ghana:

Penalties for late registration: A person who fails to register within the prescribed time is liable to a penalty of not more than two times the amount of tax payable, calculated from the date from which that person was obliged to register and pay the tax until the person applies for registration. 

Penalties for late submission of return: A taxable person who fails to submit the return without justification in the prescribed time is liable to a pecuniary penalty of GHS 500 and a further penalty of GHS 10 for each day after the due date that the return is not submitted.

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