Benefit Rate
Accommodation with furnishing 10% of the total cash emolument of the person
Accommodation only 7.5% of the total cash emoluments of the person
Furnishing only 2.5% of the total cash emoluments of the person
Shared accommodation 2.5% of the total cash emoluments of the person
Self-employment and business income. Self-employed individuals include traders, professionals or individuals carrying on any vocation, partners in partnerships and sole proprietors. Taxable business income consists of net accounting profit plus expenses that are not deductible for tax purposes, less capital (depreciation) allowances and personal reliefs.
The income of an individual from a business for a year of assessment is the gains and profits of that individual from that business for the year or a part of the year. It includes the following:
• Service fees
• Consideration received with respect to trading stock
• An amount derived that is effectively connected with the business and that would otherwise be included in calculating the income of the individual from an investment
• Gains from the realization of capital assets and liabilities of the business
• A gift received by the individual with respect to the business
• Amounts derived as consideration for accepting a restriction on the capacity to conduct the business
Individuals who only have business income from sources within Ghana may qualify to be taxed on a modified basis (that is, based on installment, turnover or cash basis).
Investment income. Investment income includes the following:
• Dividends, interest income, annuities, natural resource payment, royalties and rents
• Gains from the realization of investment assets
• Amounts derived as consideration for accepting a restriction on the capacity of the individual to conduct an investment
• Lottery winnings
• Gifts received other than those received with respect to business or employment
The dividend tax rate is 8%. The 8% tax is withheld at source, and it is imposed on dividends paid to resident and nonresident individuals.
Interest paid to individuals by resident financial institutions or the government is exempt from tax.
Capital gains. Capital gains are included in business income or investment income, depending on the source of the gain, and taxed accordingly, either at the individual’s marginal/graduated tax rate for resident individuals (highest of 35%) and 25% for nonresident individuals. The separate taxation of capital gains has been abolished.
However, individuals may elect to pay a 25% tax on gains on the realization of an asset instead of including the gain in business income or investment income.
If the gains are included in business income or investment income and taxed as such, the tax rate is the same rate applicable to the individual on his or her business income or investment income.
Deductions. Expenses wholly, exclusively and necessarily incurred in the production of income from business or investments are deductible.
Mortgage interest incurred during the year with respect to only one residential premises during the lifetime of that individual is deductible.
Individuals may deduct the annual personal reliefs granted them as indicated in the following table.
Type of allowance Amount
Children’s education allowance GHS600, per child or ward, up to a maximum of three children
Dependent elderly relative GHS1,000 per dependent, allowance up to a maximum of two dependents
Marriage/responsibility relief
GHS1,200
Disability allowance 25% of assessable income from business or employment
Old age relief Up to GHS1,500 per year
Professional/vocational training Up to a maximum of allowance GHS2,000
Contributions of individuals to the mandatory pension schemes qualify as tax reliefs under the National Pensions Act, 2008 (Act 766), as amended. Contributions to the voluntary pension scheme of an individual employee up to 16.5% of the employee’s salary are also exempt from tax if certain conditions are met.
Rates. The table below presents the progressive rates of income tax applicable to resident individuals for a tax year. Nonresidents are subject to income tax at a flat rate of 25%.
Exceeding 600,000
Withholding tax. Management and technical service fees paid to nonresidents are subject to a 20% final withholding tax. Persons may take advantage of a reduced rate under a double tax agreement, subject to the satisfaction of requirements for the grant of double tax agreement benefits.
G. Work permits and self-employment
Work permits are generally granted by the Ministry of the Interior to expatriate employees who have taken up employment in Ghana for remuneration.
Other than reciprocity, when reviewing applications, the Ministry of the Interior considers whether the activity in which the foreign national will engage will be functional, whether the applicant honors his or her tax obligations, and whether the applicant has evidence of satisfactory financial support.
An applicant may not work in Ghana while his or her work permit application and other papers are being processed.
It is an offense for a foreign national to change employers after he or she receives a work permit. If it is necessary to change employers, the Ghana Immigration Service should be notified within one week after the applicant knows he or she is changing jobs.
Work permits must be renewed annually. However, long-term (two or more years) work permits may be applied for if the applicant has worked consistently in Ghana for at least four years.
A foreign national may invest or start a business in Ghana by registering the company with the Registrar of Companies and subsequently registering it with the Ghana Investment Promotion Centre, indicating his or her field of investments. The registration with the Ghana Investment Promotion Centre is a mandatory requirement for all entities with foreign investment.
Foreign nationals may manage subsidiary companies in Ghana.
H. Residence permits
Residence permits are issued by the Comptroller-General of the Ghana Immigration Service to foreign nationals wishing to reside in Ghana or to foreign nationals who have been issued a work permit letter. The initial residence permit is usually valid for one year or issued to coincide with the duration of the work permit. Applications for renewals may be submitted to the ComptrollerGeneral within one month before the other permit expires. Subsequent one-year renewals may be granted at the ComptrollerGeneral’s discretion. Applicants must normally be sponsored by established entities in Ghana or by universities or international organizations, where applicable.
Residence permits are granted by the Ghana Immigration Service to expatriate personnel employed by companies or individuals under the immigration quota system. The immigration quota specifies the number of foreign nationals a person or firm is permitted to employ in Ghana in a particular occupation. A foreign national on a company’s quota automatically receives a residence permit but must apply for the permit to be stamped in his or her passport.
New investors who wish to take up residence in Ghana are granted residence permits only after satisfying the investment requirements of the following institutions:
• Petroleum Commission: for investment in the oil and gas sector
• Minerals Commission: for investment in the mining sector
• Department of Social Welfare: for nongovernmental organizations (NGOs)
• Ghana Investment Promotion Centre: investment in all sectors
Investors qualifying under the Free Zone Act have an open immigrant quota.
I. Family and personal considerations
Family members. Residence permits may be issued to a spouse and other dependents of a principal residence permit holder. Issuance is subject to the condition that the dependents may not undertake remunerated employment without authorization.
Driver’s permits. In general, it is illegal for foreign nationals to drive in Ghana without Ghana driver’s licenses. However, an international driver’s license may be used for a brief period. Applicants are required to pass written and practical tests to obtain a Ghana driver’s license.