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Corporate Income Tax

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GRADomestic TaxTax TypesCorporate Income Tax

Corporate Income Tax (CIT)

This is a tax imposed on the income of companies incorporated under the laws of Ghana or elsewhere. Section 1 of the Income Tax Act, 2015, (Act 896). Click HERE to File and Pay your CIT

Category

The following entities shall be subject to Corporate Income Tax
  • A friendly society, building society or similar society
  • A pension fund, provident fund, retirement fund, superannuation fund or similar fund
  • A government, a political subdivision of a government, or a public international organisation
  • A partnership in which at least twenty of the partners have limited liability for the debts of the partnership
  • A trust with at least twenty beneficiaries whose entitlements to participate in the income or capital of the trust are divided into units such that the entitlements are determined by the number of units owned
  • Non-resident company which operates through a branch or which has a permanent establishment within Ghana is subject to tax in the same manner as a resident company, if the permanent establishment is a Ghanaian permanent establishment

Steps Entities Must Take

  • Register as a taxpayer Every business liable to taxation, under the Income Tax Act, 2015, (Act 896)-as amended is required to register with GRA as a taxpayer. You can visit any DTRD Taxpayer Service Centre to be registered. Please Note: You must ensure that all your business details (certificate to commence business, certificate of incorporation, directors’ CV etc.) are up to date before you visit our office.
  • Submit annual tax returns Every registered company must file its annual returns for each year of assessment. Returns can be submitted or filled either by visiting any DTRD Taxpayer Service Center or electronically: click on File and Make Payment.
  • Submit estimated self- assessment In addition to annual returns, every company is required to submit a provisional self- assessment within the first quarter of every year of assessment. Taxpayers are permitted to revise upwards or downwards the self-assessment estimates made until the last day of the basis period of that company
  • Make payment Every registered entity which carried out taxable activity and earned an income is mandated to make payment of all such taxes due, arrears, penalties and interest thereon on appropriate due dates. Click on File and Make Payment or visit the nearest DTRD Taxpayer Service Centre to pay all your taxes.

Payment Period of CIT

Self-Assessment Payment must be done in four quarterly instalment
  • First payment: on or before the last day of the 1st quarter of the year i.e. 31st March of each year of assessment
  • Second payment: on or before the last day of the 2nd quarter of the year i.e. 30th June of each year of assessment
  • Third payment: on or before the last day of the 3nd quarter of the year i.e. 30th September of each year of assessment
  • Fourth payment: on or before the last day of the 4th quarter of the year i.e. 31st December of each year of assessment

Annual Returns 

When annual returns are submitted, payment must be done on taxes not-in-dispute i.e. the outstanding of the difference between the tax in the final account and the self-estimated taxes paid.

Tax on Assessment or Audit

Payment of tax upon an audit conducted or a provisional assessment notice issued by the Authority must be honoured within the period specified in such notice.

Tax Rate

The general Corporate Income Tax rate is 25%. However, there are contemporary rates depending on the nature of business carried out by an entity, the location of the business and the specific industry in which it operates.

The tax rate applicable to a company depends on the industry as follows:

Item Rate%

Income of a Trust

25

Company principally engaged in the hotel industry

22

Company engaged in the export of non- traditional exports

8

Financial institutions from loans granted to farming enterprises

20

Financial institutions from loans granted to a leasing company

20

Manufacturing companies located in regional capitals  (except Accra & Tema)

18.5

Manufacturing companies located outside Accra, Tema and the regional capitals

12.5

Free Zone Enterprises after 10 years tax holiday (on domestic sales)

25

Free Zone Enterprises after 10 years tax holiday (on export of goods and services)

15

Petroleum income tax

35

Mineral income tax

35

The following businesses pay 1% tax during their tax holidays. These businesses pay the actual tax rates after their tax holidays.

Item Rate%

Agro processing business conducted wholly in the country for the first five (5) years

25

Cocoa-by product business wholly in the country for the first five (5) years.

25

Tree crop farming for the first  ten (10) years

25

Cash crops or livestock (excluding cattle) for first 5 years

25

Cattle farming for first 10 years

25

Waste processing business for first 7 years

25

Income derived from a certified low cost housing company low cost housing company

25

Young entrepreneurs who are into businesses such as manufacturing, information and communication technology, agro processing, energy production, waste processing, tourism and creative arts, horticulture and medicinal plants have five years tax holidays and after five years the following rates apply

Item Rate%

Accra and Tema

15

Other regional capitals outside Tema and Accra

12.5

Outside, Accra, Tema and other regional capitals

10

The three northern regions

5