These are the VAT procedures which apply to goods imported into and exported from Ghana. Also explained are the procedures to be used by exporters of services, the recipients of imported services and with goods entering and leaving the Free Zone.
The laws governing VAT on Imports and Exports are Value Added Tax Act, 2013 (Act 870) and Value Added Tax Regulations, 2016 (L.I.2243). Sections 35, 36, 37 and 50, and Schedule 2 of the Act, and Regulation 39 and 42 deal with exports.
The goods which attract VAT at importation are classified as such in the Customs Division Tariff in accordance with the Harmonized System (HS) Code classification which encompasses the ECOWAS Common External Tariff (CET). This classification also includes goods exempted under the law.
VAT is charged on all imports, other than those specifically exempted under the Act or classified as exempt under the Harmonized System (HS) Code , at the time of importation. However, VAT registered importers are entitled to claim this VAT as input tax, unless they make exempt supplies, in which case only the VAT incurred in making taxable supplies will be reclaimable.
For VAT purposes, the time of importation is the same time at which the customs duty and other duties and taxes become due.
The value for charging VAT on imports is the value for customs duty plus import duties and other taxes which may be chargeable.
It is important for Importers, Exporters, Freight Forwarders and Shipping and Clearing Agents to be aware of the changes brought about by the introduction of VAT. The services provided by Freight Forwarding, Shipping and Clearing Agents and Port Authorities are liable to VAT and providers of these services are required to register for VAT. The VAT on imports paid by a freight forwarding or shipping or clearing agent on behalf of an importer is an input tax which can be reclaimed by the importer and not the agent. This also applies to the VAT paid on any other services on behalf of the importer. To facilitate this, agents are required to supply importers with customs entries and assessment notices for imports and tax invoices for services supplied. However, where the agent is charged directly for a service and the tax invoice is in his name, he is entitled to recover the VAT as input tax but he must also account for output VAT in full on the services he rendered to the importer.
Before an importer can reclaim the VAT paid on imports, he must be in possession of a valid customs entry, an assessment notice and any tax invoices for services. The importer should claim any VAT on imports to which he is entitled by including it in box 17 on his next VAT return.