Income Tax Implications of the Share Acquisition:
The acquisition of 60% of the shares in Konadu Yiadom Ltd by Japan Rocks will trigger several tax implications:

1. Change in Underlying Ownership:
   Under section 62 of the Income Tax Act, 2015 (Act 896), a change in underlying ownership of more than 50% results in the following:
   • Deemed Realisation of Assets and Liabilities:
     The assets and liabilities of Konadu Yiadom Ltd will be treated as though they were realised immediately before the change in ownership. This may lead to the recognition of gains or losses, which would be subject to tax.
2. Disallowance of Loss Carryforward:
   Konadu Yiadom Ltd’s prior losses of GH¢3,600,000 cannot be carried forward after the change in ownership. This means that Japan Rocks will not benefit from the pre-existing tax losses. The loss incurred before the acquisition is not deductible under section 62(2)(b) of the Income Tax Act.
3. Disallowance of Financial Cost:
   The financial cost of GH¢900,000 incurred by Konadu Yiadom Ltd prior to the acquisition will not be deductible after the change in ownership. According to section 16(3) of the Income Tax Act, the financial cost incurred before the change in underlying ownership cannot be deducted by the new owners.
4. Separate Year of Assessment:
   Due to the significant change in ownership, the year before and after the acquisition will be treated as separate years of assessment for tax purposes. Konadu Yiadom Ltd will be required to file two separate tax returns: one for the period before the acquisition and another for the period after.
5. Potential Tax on Gains:
   If there is any revaluation of assets during the acquisition process, any gains on these assets may be subject to corporate income tax, depending on the nature of the transaction (e.g., asset purchase vs. share purchase). However, the acquisition structured as a share purchase would typically avoid capital gains tax in Ghana.

Conclusion:
The acquisition of 60% of Konadu Yiadom Ltd by Japan Rocks brings about critical tax implications, particularly the disallowance of the pre-existing loss and financial cost incurred before the acquisition. Japan Rocks should carefully consider the tax impact of the transaction and ensure compliance with Ghana’s Income Tax Act.