Ghana’s tax calendar extends from January to December. Businesses using a different accounting cycle are assessed on the financial period that closes within the relevant calendar year.
A company must submit its annual income tax return within four months of its financial year ending. Businesses needing additional preparation time can apply for an extension, although the additional filing period cannot exceed two months.
Instalments and Final Settlement
Corporate income tax is collected through four equal quarterly instalments. These fall due at the close of March, June, September and December during the assessment year. Instalment payments remain provisional; they do not establish the company’s definitive annual liability.
Once annual results are available, the company must reconcile its payments against the final tax calculation. Any remaining balance must accompany the final return, with both due within four months after the financial year closes.
An audit may produce an additional assessment from the Commissioner-General of the Ghana Revenue Authority (GRA). Payment is required within 30 days after the assessment notice is served, unless the Commissioner-General exercises discretion to allow more time.
Consequences of Late Payment
Unpaid tax attracts a charge calculated using 125% of the statutory rate. This is compounded monthly and applied to the outstanding amount at the beginning of the relevant period. Delays can therefore increase the amount a business ultimately owes.
How Tax Audits Operate
The GRA conducts regular examinations of taxpayers’ affairs. Officials authorised by the Commissioner-General have extensive access rights covering business premises, accounting documents and electronically stored information.
Mining companies, upstream petroleum operators and financial institutions face greater audit exposure. A refund application can also trigger scrutiny. Ordinarily, the authority informs the taxpayer before starting an audit and subsequently shares a report explaining its findings.
Keeping Records and Recovery Limits
Under the Revenue Administration Act, 2016 (Act 915), taxable persons must preserve supporting records for at least six years. These should document money received and paid, income earned, expenditure incurred, assets held and liabilities owed.
Separately, the limitation period described for actions seeking recovery of tax is 12 years. Businesses should distinguish this recovery window from the minimum period prescribed for retaining records.
Financial Account Reporting
The Standard for Automatic Exchange of Financial Account Information Act, 2018 (Act 967), requires covered financial institutions to identify reportable accounts through due diligence and provide relevant individual and entity account information to the GRA.
Annual submissions must reach the authority within six months after the applicable calendar year ends.
Areas Receiving Particular Attention
Compliance reviews concentrate on refund claims, consistency between tax declarations and financial statements, arrangements designed to avoid taxation, and pricing in transactions between related parties operating within corporate groups.
FAQs
When must companies file their annual tax returns in Ghana?
Companies must file within four months after their financial year ends. They can apply for an extension of up to two months.
How is corporate income tax paid?
In Ghana, companies pay four equal quarterly instalments and settle any outstanding balance when submitting their final annual return.
What happens if a company pays late?
Overdue tax attracts a charge calculated at 125% of the statutory rate, compounded monthly, increasing the outstanding liability.
What can trigger a GRA audit?
Refund claims can prompt an audit. Mining, upstream petroleum and financial services businesses also face greater scrutiny.
How long should businesses keep tax records?
Businesses must retain records of income, expenses, assets and liabilities for at least six years.
When must financial institutions report financial account information?
Covered institutions must submit their annual reports to the GRA within six months after the relevant calendar year ends.
Source: Ghana Revenue Authority