The Ghana Revenue Authority (GRA) conducted a tax audit of the activities of Beiersdorf Ghana Limited (the “Complainant”) for the 2014, 2015 and 2016 taxation years. The claimant was subject to a tax debt in the form of GHS1 689 149.34 (subsequently lowered to GHS1 085 392.36). The complainant had 30 days to pay the tax debt. The complainant asked the Commissioner-General of the GRA to verify the results of the tax audit. The appeal was dismissed by the Commissioner-General. Subsequently, on 18 January 2018, the applicant appealed to the High Court, claiming, inter alia, that gra had erred in terminating the complainant`s payments to Beiersdorf AG, the applicant`s offshore parent company (the `parent company`), as licence payments under a distribution licence agreement (the `Agreement`). Depending on the transfer of services set by the TTA, the taxable person is legally obliged to collect fees within certain thresholds. The thresholds are as follows: in Ghana, technology transfer agreements are concluded between companies in Ghana (called transfers) and companies located outside Ghana (called transferors). The provisions of any technology transfer agreement in Ghana must comply with and be subject to the following laws: it is mandatory that all companies participating in any form of technology transfer agreement register this agreement in order to allow the transfer of payments. The best part is that the annual transfer is treated as an effort by the ceding company in Ghana and therefore deducted from the pre-tax profits. Corporate tax is 25% per year on profits, which allows you to imagine the huge savings made by simply registering your TTA.
The decision in this case underlines the importance of subjecting agreements between Ghanaian and foreign companies to the above-mentioned ATT requirements. If an agreement is considered TTA, all the usual rules apply, especially with regard to registration and fee percentages. Failure to register such agreements may, among other things, result in tax liabilities, including interest and other penalties. The Foreign Exchange Act, 2006 (Act 723) guarantees a company the unconditional transferability of fees and charges in convertible free currency in respect of a technology transfer agreement registered under the Ghana Investment Promotion Centre Act. An TTA is an agreement between a foreign and Ghanaian unit for a period of at least 18 months and no more than 10 years and includes the following services: View full article here: legalstonesolicitorsllp.com/2018/10/07/technology-transfer-administration-in-ghana/ In accordance with Law 865, all technology transfer agreements must be verified and registered by the Ghana Investment Promotion Centre. The Ghanaian government authority is responsible, among other things, for the registration and monitoring of all technology transfer agreements in Ghana. Any fees due to the taxable person in respect of the unregregistsed TTA may not be legally transferred. *net sales for the purposes of technology transfer: the ex-works selling price of the product excluding turnover tax and excise duties levied by the State, or the net income from a service, less landed costs or payment for components, materials and supplies imported by the technology supplier, with the exception of original equipment and the first turn of components; Imported materials and stocks.
In opposition to the applicant`s case, the GRA argued that the agreement was an TTA and that it should be registered with the GIPC. . . .