VAT on Non-Life Insurance

VAT on Non-Life insurance policies will take effect on July 1st, 2025 as confirmed by the Ghana Revenue Authority (GRA)

VAT on Non-Life Insurance policies in Ghana is charged at a rate of 15%. Insurance providers are responsible for applying this VAT on applicable premiums and remitting it to the GRA.

No, VAT will not be charged on policy claims. VAT applies only to the premiums paid for non-life insurance policies, not to the claims or payouts made by the insurance company to the policy holder. Claims are considered compensation for loss and are not a taxable supply under the VAT Act, so they do not attract VAT.

VAT will apply to non-life insurance products such as:

1. Fire insurance
2. Property insurance
3. Marine insurance
4. Travel insurance

Motor insurance, however, remains exempt under the VAT (Amendment) Act 2023, (Act 1107) due to its compulsory nature and the need to ensure affordability and accessibility for vehicle owners.

Motor insurance is a mandatory requirement under the Motor Insurance Act. Exempting it helps protect consumers from increased financial burdens and ensures continued access to essential coverage.

VAT applies to all taxable non-life insurance premiums, regardless of when issued or renewed. Whether it is a new or renewed policy, or one starting mid-year, VAT is due at the point of supply (when the policy becomes effective).

Yes. Insurers that provide taxable non-life insurance services will now be able to claim input VAT on their operational costs. This change enhances their cash flow and supports more formal and compliant operations.

GRA is carrying out a public education campaign through:
Stakeholder engagement forums
Media outreach (radio, TV, digital platforms)
Collaboration with the National Insurance Commission and insurance companies
These efforts aim to promote clarity, ensure consistency, and boost compliance.

The policy supports Ghana’s commitment to building a fair, efficient, and comprehensive tax system. It represents a shift toward a broader VAT base and is part of ongoing tax reforms, including reducing exemptions, increasing compliance, and digitizing tax administration.

Yes. Insurance companies are expected to provide clear and transparent invoices that separately indicate the VAT charged on premiums. This transparency will help policy holders understand the cost breakdown and support compliance.

No. The VAT applies to policies issued or renewed on or after July 1, 2025. Existing policies that were fully paid and issued before this date will not be subject to VAT, unless they are amended or extended afterward.

Insurance companies should:

1. Update their accounting and invoicing systems to incorporate VAT
2. Train staff on the application and reporting of VAT
3. Communicate proactively with clients about the upcoming changes
4. Ensure timely registration for VAT, if not already registered

Failure to comply with the VAT requirements such as incorrect invoicing, non-remittance, or late filing may lead to penalties, interest charges, or legal sanctions under the VAT Act. GRA urges all service providers to comply to avoid enforcement actions.

In person:

1. Ghana Revenue Authority, Head Office Off Starlets ‘91 Street, Accra
2. The nearest Taxpayer Service Centre (TSC)

By post:

1. Ghana Revenue Authority,P.O.BOX 2202, Accra
2. Toll-free:0800 900 110,
3. WhatsApp: 055 299 0000 or 020 063 1664
4. Email:info@gra.gov.gh