Starting a new business in Ghana can be an exciting and rewarding venture, but it also comes with some responsibilities and obligations. One of them is to register for VAT if you meet certain criteria and thresholds. In this article, we will explain what VAT is, who needs to register for it, and how to do it in Ghana.
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How to register for VAT in Ghana: A Guide for new businesses who are starting to operate in this country
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Ghana
Author: Kristina Dosen
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Fiscal subject related
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939
Content accuracy validation date:
24.11.2023
Content accuracy validation time:
14:15h
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VAT stands for Value Added Tax, and it is a tax that is added to the price of goods and services that are sold in Ghana. The current standard rate of VAT is 12.5%, and it applies to most goods and services, except for those that are exempt or zero-rated. VAT is collected by the Ghana Revenue Authority (GRA), and it is used to fund public services and infrastructure.
VAT registration is compulsory for any person who makes or expects to make a taxable supply of goods or services that exceeds GH₵ 200,000 over a 12-month period or GH₵ 50,000 over a three-month period. A taxable supply is any supply of goods or services that is not exempt from VAT. If you fall under this category, you have to register for VAT and charge VAT on your sales, as well as file VAT returns and pay VAT to the GRA.
On the other hand, VAT registration is voluntary for any business that does not meet the compulsory registration thresholds but wishes to register for VAT. Voluntary registration may have some benefits, such as being able to claim input tax credits and refunds and enhancing the credibility of the business. If you choose to register for VAT voluntarily, you have to follow the same rules and obligations as compulsory registrants.
When it comes to VAT registration for non-residents, it requires a physical representative in Ghana who can act on behalf of the non-resident business and handle the VAT compliance and payment. Non-residents who provide telecommunication or electronic commerce services for use or enjoyment in Ghana must also register and account for VAT through the GRA's online portal. These requirements are meant to ensure that non-resident businesses pay their fair share of tax in Ghana and do not gain an unfair advantage over local businesses.
Also, VAT registration can be done by applying to the Commissioner-General of the GRA for registration as a taxable person. The application form can be obtained from the GRA website or any of its offices. The application must be accompanied by the following documents:
- Copies of: the certificate of incorporation or registration of the business; the certificate to commence business or the business operating permit; the tax identification number (TIN) certificate; the national identification card or passport of the applicant or the representative; the lease agreement or proof of ownership of the business premises;
- A bank statement or a letter from the bank confirming the account details of the business;
- any other document that the GRA may require.
VAT registration must be done within 30 days of becoming liable to register. Failure to register may result in a penalty of up to twice the amount of tax on taxable supplies, payable from the time the person was required to apply for registration until they file an application with the GRA. Therefore, it is important to register for VAT as soon as possible and avoid any unnecessary fines or penalties.
We hope that this article has given you some useful information and guidance on how to register for VAT in Ghana. For more information, you can visit the GRA website or contact the GRA office nearest to you. We wish you all the best in your new business venture.
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