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Gift Tax

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GRA⋅Domestic Tax⋅Tax Types⋅Gift Tax

Gift Tax

Gift tax according to Income Tax Act, 2015 Act 896, is when a person receives a gift in respect of their employment, business, and/or investment other than under a will, upon intestacy or by way of transfer to the spouse, child or parent of that person. Any such gift is taxable under the income tax law.

Gift from Employment

Under section 4(2vii), of Act 896, 2015, Gift from Employment is defined as a gift a person may receive in respect of employment. Such gifts may arise out of one’s employment relationship, donated by the employer, an associate of the employer or a third party under an arrangement with the employer or an associate of the employer.

Gift from Business

Under section 5(2vi), of Act 896, 2015, Gift from Business is defined as a gift that a person may receive in respect of business he/she owns either fully or partially.

Gift from Investment

Under section 6(2v) as amended, it is a gift received by a person other than a gift received in respect of business or employment.

Rate of Tax

The tax payable on gifts under section 4(2vii) – Gifts from Employment, and 5(2vi) – Gifts from Business, is at a graduated rate that is added to the person’s income from employment or business for the year of assessment.

 The tax payable on Gift from Investment is 15% for a resident Ghanaian and 25% for a non-resident Ghanaian.

Valuation

The value of a taxable gift is the market value of the gift at the time of the receipt.

 

Returns and Payment of Tax

When a gift is received by an individual and that gift is not in respect of business and employment, the taxpayer shall within 21 days of receiving the gift, submit to the GRA in writing a return containing the following information: 

  • The description and location of the taxable gift
  • The total value of the gift
  • How it is calculated and tax payable with respect to that gift
  • The full name and address of the donor of the gift
  • Any other information required by the Commissioner
That person shall remit to the Commissioner the amount of tax calculated as payable and the payment of tax is due at the time the return is submitted.

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