Ghana Revenue Authority Clarifies Tax Status for Individuals Earning Income Abroad

The Ghana Revenue Authority (GRA) has provided clarity on the tax status of resident individuals who earn incomes abroad and whether they are deemed 'resident individuals' for tax purposes. According to the Income Tax Act 2015 (Act 896), Sections 3 (2) (a), 103, and 111, individuals considered resident for tax purposes include:

• Citizens with a permanent home in Ghana residing in the country throughout the year
• Those present in Ghana for at least 183 days in any 12-month period
• Government employees or officials posted abroad
• Citizens temporarily absent from Ghana for not more than 365 continuous days who maintain a permanent home in Ghana

To enable simpler declaration and payment of taxes for resident individuals to report undisclosed incomes, the GRA has opened a special window for taxpayers to rectify their records. All eligible individuals are strongly encouraged to utilize this opportunity.

Why this matters: This move by the GRA is part of the government's efforts to find a long-term solution to the country's fiscal needs, particularly in revenue mobilization. The clarification on tax status and the special window for reporting undisclosed incomes are expected to replace the projected GH¢1.8 billion in revenue target.

The legal definition of a resident individual for tax purposes is grounded in the Income Tax Act 2015 (Act 896), providing a clear framework for determining tax obligations. By offering a special window for taxpayers to rectify their records and report undisclosed incomes, the GRA aims to encourage compliance and boost revenue collection.

Key Takeaways

• GRA clarifies tax status of resident individuals earning foreign income
• Resident individuals include citizens with permanent homes, 183+ days presence
• GRA opens special window for taxpayers to report undisclosed incomes
• Move aims to boost revenue collection and address fiscal needs
• Legal definition of resident individual for tax purposes in Income Tax Act