INDIVIDUAL TAXES
SIGNIFICANT DEVELOPMENTS
There have been no significant tax or regulatory developments in individual taxation in the past year.
TERRITORIALITY AND RESIDENCE
Ghana taxes its resident individuals on any of the following income accruing in, derived from, brought into, or received in Ghana.
1. Gains or profits from any employment, including any allowances or benefits paid in cash or given in kind to or on behalf of an employee other than in respect of medical or dental costs, or any passage from or to Ghana.
2. Dividends.
3. Any charge or annuity.
4. Royalties, premiums and any other profits arising from property, including rents from immovable property, except within the first five years of completing of the property.
5. Receipts, including royalties or periodic or deferred payments of any kind derived from any transaction wherever and whenever made, affecting directly or indirectly and/or from any natural resources in Ghana, and notwithstanding whether the receipts are paid within or outside Ghana.
Individuals are residents of Ghana who, except for such temporary absences as may seem reasonable to the Commissioner, have actually resided in Ghana at one or more times for a period equal in the whole to 183 days in the year of assessment. Individuals who are in Ghana for some temporary purpose only and do not intend to establish residence therein are not considered residents. Citizenship or nationality do not determine liability to Ghana income tax.
Nonresidents are liable to Ghanaian income tax on gains and profits of any trade, business, profession, or vocation carried on in Ghana.
GROSS INCOME
Employee gross income/Total emoluments paid to the employee or on the employee's behalf are included in the chargeable income of any employee for any year of assessment. All fixed cash allowances on account of housing and entertainment are taxable, but reimbursements for expenses actually incurred exclusively on behalf of and for the benefit of the employer are not taxable to the employee.
Chargeable income also includes any benefit derived from the use of a motor vehicle, furnishing or accommodation provided by the employer. There are no concessions for foreigners.
Capital gains and investment income/A capital gains tax is payable by every person on any capital gains accruing or derived from the realization of any chargeable asset, including buildings of a permanent or temporary nature; business and business assets, including goodwill; land other than agricultural land; any right or interest in, to or over any stocks and shares; and any assets declared as chargeable by a legislative instrument. The applicable rate is 5%, regardless of the period for which the asset was held prior to disposal.
Withholding tax on interest income for individuals has been abolished.
Nonresidents are subject to withholding tax of 10% on any dividend income paid to them by a resident.
DEDUCTIONS
Business deductions/Expenses of a private of domestic nature are generally not deductible. For all individuals other than employees, all outings and expenses incurred wholly, exclusively and necessarily in the production of the income that is subject to tax are deductible. These include the following.
1. Interest on money borrowed and employed in acquiring the income.
2. Rent payable on land or buildings occupied for the purpose of acquiring the income.
3.Repairs and maintenance expenses of premises, plant, machinery, etc, employed in acquiring the income.
4.Rlcal rates and taxes on premises.
5.Bad debts.
6.Losses incurred.
No blanket or standard deductions are allowed.
Nonbusiness expenses/Apart from social security contributions and qualifying insurance premiums, no nonbusiness expenses are deductible, and no standard deductions are allowed.
Personal allowances/The tax-free threshold from May 1,1998 is GHC900,000. In addition, there is an allowance of GHC300,000 for a married man, a married woman maintaining her husband and household, and an unmarried man or woman with two or more dependent children. Disabled persons(self-employed or employees)are allowed a tax-free deduction of 25% of the total income accruing to them. There is an old-age relief of GHC300,000 deductible from the total income of a self-employed individual or employee who is more than 60 years old. Children's education relief of GHC240,000 per child in a registered secondary school in Ghana is granted. This is restricted to three children and is claimable by one parent only. Persons who have aged relatives dependent on them for the necessities of life are granted a relief of GHC200,000 in respect of each for a maximum of two such relatives. All residents are entitled to these relief's.
TAX CREDITS
There are no tax credits available to short-term residents.
For both residents and nonresidents who have had tax withheld f
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