Question Tag: Non-resident

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  • 5 Marks

PT – May 2020 – L2 – Q2a – Value-Added Tax (VAT),

Examines the VAT implications for a non-resident company's purchase and servicing of vehicles in Ghana.

Pamela Noi Ltd is a non-resident person. The Company’s Procurement Officer came down to Ghana to buy Ten (10) Toyota Vehicles manufactured by Safo Kantanka to be delivered in Mali. The vehicles are going to be used in Mali. The management of Pamela Noi Ltd requested that the vehicles be serviced in Ghana by High Class Mechanic, a popular mechanic in Accra-Ghana.

Required:

i) What is the Value Added Tax (VAT) implication on the vehicle to be acquired by Pamela Noi Ltd?
(2.5 marks)

ii) What is the VAT implication of the servicing of the vehicle in Ghana?
(2.5 marks)

i) VAT Implication on Vehicle Purchase:
VAT is charged on goods, services, and imports under the destination principle. Since the 10 vehicles purchased by Pamela Noi Ltd are to be used in Mali (outside Ghana), the purchase does not attract VAT in Ghana.

ii) VAT Implication on Vehicle Servicing:
VAT is charged when services are consumed in Ghana. Since the vehicles will be serviced in Ghana by a Ghanaian mechanic, this service is a taxable activity and will attract VAT under the destination principle.

(5 marks evenly spread using ticks)

  • 5 Marks

PT – May 2020 – L2 – Q5b – Special considerations for taxation of gifts and capital allowances.

This question asks to compute the tax payable by Mr. Nyametse John on gifts received from his pastor in 2018, considering the exchange rate for foreign currency.

Mr. Nyametse John is a member of Community Christ Church. Mr. Nyametse does not run a business, nor is he employed. In the 2018 year of assessment, he received the following from his Pastor, who just returned from the United Kingdom:

Item Value (£)
Wristwatch 100
Shoes 120
Mobile Phone 150
Exchange rate: GH¢6 – £1

Required:
Compute any tax payable for the 2018 year of assessment. (5 marks)

b) Mr. Nyametse John
Computation of Tax Payable
Y/A 2018
BP January 1-December 31, 2018

(5 marks evenly spread using ticks)

  • 10 Marks

PT – July 2023 – L2 – Q5a – Withholding Tax Administration

Calculate taxes and determine whether each is final based on various transactions provided.

The following information is available to you as a tax consultant:

Description Amount (GH¢)
Dividend paid to resident person 100,000
Dividend paid to non-resident person 200,000
Payment of goods to resident person 300,000
Payment of goods to non-resident person 400,000
Rent – residential property 150,000
Rent – commercial property 300,000
Natural Resource Payment 1,000,000
Management and Technical Service fees to non-resident 400,000
Interest paid to resident financial institution 20,000,000
Royalty paid to non-resident person 400,000

Required: Compute taxes from the above information and indicate whether the tax is final or not final.

Description Amount (GH¢) Tax Rate (%) Tax to be Withheld (GH¢) Remarks
Dividend paid to resident person 100,000 8 8,000 Final Tax
Dividend paid to non-resident person 200,000 8 16,000 Final Tax
Payment of goods to resident person 300,000 3 9,000 Not a Final Tax
Payment of goods to non-resident person 400,000 20 80,000 Final Tax
Rent – residential property 150,000 8 12,000 Final Tax
Rent – commercial property 300,000 15 45,000 Final Tax
Natural Resource Payment 1,000,000 15 150,000 Not a Final Tax
Management and Technical Service fees to non-resident 400,000 20 80,000 Final Tax
Interest paid to resident financial institution 20,000,000 0 0 Exempt
Royalty paid to non-resident person 400,000 15 60,000 Final Tax

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