GRA to automate treaty benefit applications amid major international and local tax reforms

The Head of the Ghana Revenue Authority’s (GRA) International Tax Office, Nana Mensah Otoo, says the GRA is set to fully digitalise the application process for taxpayers and multinational companies seeking treaty benefits, a move aimed at improving efficiency and accessibility.

Speaking during a UK-Ghana Chamber of Commerce (UKGCC) and PwC Ghana webinar on “Double Taxation Agreements (DTAs) & International Tax Cooperation: what multinationals need to know”, Mr. Otoo disclosed that the move has significant implications for businesses operating across borders.

By streamlining applications, the GRA aims to reduce compliance costs, enhance certainty in tax treatment, and improve access to treaty benefits for qualifying taxpayers.

Mr. Otoo noted that at present, verification processes, including confirmation of tax residency certificates with treaty partners, can extend processing periods. 

“A major challenge is that most taxpayers fail to submit critical contract details. They also forget to include key documentation such as withholding receipts or payments that have been made. This delays the process of granting the application”.

Mr. Otoo stressed that though an automated treaty benefit application system will enhance ease of doing business in Ghana, taxpayers still need to apply to the GRA for approval before they can enjoy the benefits of DTAs.

Panelists at the webinar also highlighted additional international tax cooperation frameworks and local tax reforms currently being developed or expanded. Mr. Otoo noted that Ghana has signed the ECOWAS Treaty, meant to enhance intra-region trade, but is awaiting Parliamentary ratification.

Furthermore, on international tax cooperation developments, Technical Adviser at the Ministry of Finance, Daniel Nuer, noted that an intergovernmental committee has been set up to develop a United Nations Framework Convention on International Tax Cooperation which is expected to be finalised and submitted to the UN General Assembly for consideration during its 82nd session commencing September 2027.

“The Framework Convention seeks to establish an international tax system that is transparent, inclusive, equitable, fair and effective”, Mr. Nuer remarked, as well as “provide uniformity, flexibility, and resilience to the international tax system”.

The GRA also indicated that Ghana is considering the introduction of mechanisms to tax digital assets. There are also plans to introduce a “significant economic presence” test that will capture income from remote and digital services as the traditional concept of Permanent Establishments (PE), is limited in its ability to capture remote service delivery.

“The digital asset tax and introduction of significant economic presence concept of taxation aim to reaffirm the taxing right of source countries. So, Ghana will very soon amend our income taxes to introduce digital asset taxation to expand the tax net”.

Understanding Ghana’s tax treaties and their role in investment

Ghana’s double taxation agreements (DTAs) are designed primarily to eliminate double taxation, prevent tax evasion, and provide clarity for cross-border investors.

According to Nana Mensah Otoo, the country has initiated 36 DTAs, with 14 currently in force including those with the United Kingdom, Germany, France, Netherlands and Belgium. 

The agreements generally provide relief on withholding taxes, clarify permanent establishment thresholds, improve dispute resolution mechanisms, and support cooperation between tax authorities.

The speakers noted that the agreements also help multinational businesses better structure investments, repatriate profits more efficiently, and avoid excessive tax exposure.

Private sector challenges

Despite the benefits, the private sector point to ongoing challenges in applying DTAs, especially in areas of interpretation and administrative processes.

A lawyer and tax practitioner with Legal Ink Lawyers and Notaries, Dawda Mohammed Hafisdeen, explained that many businesses struggle with determining whether their activities constitute a permanent establishment, which is critical in determining tax liability.

He also highlighted complexities in contracts involving supply and installation, where authorities may treat them as a single taxable activity, creating uncertainty for investors. 

Administrative bottlenecks also pose challenges, in addition to dispute resolution timelines. While DTAs provide for mutual agreement procedures, these can take years to conclude, affecting investment decisions and business profitability.

“If it takes about five years to resolve these disputes, then the certainty that DTAs are supposed to provide will probably not inure to the benefit of investors”, he noted. 

Despite these challenges, he advised taxpayers to maintain transparency and proper documentation in their dealings with tax authorities.

GRA reaffirms commitment to ease of doing business

Responding to concerns raised by the private sector, Nana Mensah Otoo reiterated the GRA’s commitment to balancing tax compliance with investment promotion and ease of doing business.

“We are investment pro,” he said, while explaining why the Authority sometimes reviews contracts side-by-side with proposed business activities before granting treaty approvals.

He acknowledged the operational challenges businesses face but urged taxpayers to ensure contracts are properly structured and separated where necessary to facilitate clearer tax assessments.

He stressed that the GRA remains committed to providing guidance and improving administrative efficiency as international tax rules continue to evolve.

Meanwhile, Daniel Nuer also urged businesses to stay informed about emerging international tax developments and engage tax authorities early when undertaking cross-border transactions.

The webinar additionally explored withholding tax obligations, exchange of information frameworks, mutual administrative assistance in tax matters, permanent establishment rules, beneficial ownership requirements and transfer pricing considerations.

The session was moderated by Christiana Osei-Mensah, Associate Director at PwC Ghana, and brought together tax professionals, multinational businesses, regulators and members of the business community.

المصدر: MyJoyOnline (GH)