An Accra High Court has issued a landmark ruling on the tax assessment of Maersk Drillship IV Singapore, declaring that its income arising from its Ghanaian Permanent Establishment is assessable, rejecting the company’s claim of exemption under the Petroleum Agreement.
The total money involved is a substantial sum of $15.5 million ($15,513,221.16) in tax revenue.
This comprises $12.8 million ($12,805,543.20) in direct taxes and $2.7 ($2,707,607) million in indirect taxes.
Breaking down the figures, GRA has established an official exchange rate of GH?11.5668 to the dollar.
Utilizing this conversion rate, the total tax revenue of $15,513,221.16 transforms into GH?179.4 million (GH?179,438,326.513488).
The court, comprising Justices Mrs Janapare A. Bartels-Kodwo, Alex Poku-Acheampong, and Jerome Noble-Nkrumah, delivered the judgment in response to an appeal filed by Maersk Drillship IV Singapore.
The crucial issues addressed by the court included determining the party whose income was under assessment, th
e assessability of the income, and whether the income was exempt from income tax under Ghanaian law and the Petroleum Agreement.
Maersk Drillship IV Singapore contended that the assessed income was related to its business operations and, therefore, exempt from further taxation, citing provisions in the Petroleum Income Tax Act and the Petroleum Agreement.
However, the Ghana Revenue Authority (GRA) disagreed, arguing that the income in dispute belonged to Maersk Drillship IV Singapore as a distinct entity separate from its Ghanaian registered external company.
After analyzing the facts and applying the law, the High Court determined that the income in question was that of Maersk Drillship IV Singapore, a separate legal entity from its Ghanaian Permanent Establishment.
The court established that this income, remitted by its Ghanaian Permanent Establishment, is assessable under Section 3 of Act 896.
The court further clarified that under Section 3(2) (b) of Act 896, non-resident entities earning income thro
ugh a Ghanaian permanent establishment are subject to Ghanaian income tax.
Since the income in question arose from the Ghanaian permanent establishment of Maersk Drillship IV Singapore, Section 3(2) (b) of Act 896 logically applies, making the income assessable for tax under the Income Tax Act.
Regarding the exemption from taxation, Maersk Drillship IV Singapore argued that, under the Petroleum Agreement, a portion of its business income withheld by its contractor incurs no further tax liabilities.
GRA countered, emphasizing that the shareholders of Maersk Drillship IV Singapore are the ones being assessed, and branch profit taxes do not apply to the company or its shareholders.
The court clarified that the income being taxed does not pertain to Maersk Drillship IV Singapore but to its Ghanaian Permanent Establishment, a separate legal entity.
The ruling explained that the income earned by the Ghanaian Permanent Establishment is not subject to further taxes under the Petroleum Agreement when remitting pr
ofits to its parent company.
However, the court stated that a non-resident entity earning income from a Ghanaian permanent establishment is earning income as contemplated under Section 3(2) (b)(ii) of Act 896, and, therefore, Section 60 of Act 896 applies, making the income of Maersk Drillship IV Singapore from repatriated profits of its Ghanaian Permanent Establishment liable to branch profit tax.
Source: Ghana News Agency
An Accra High Court has quashed Office of the Special Prosecutor (OSP’s) report that accused two former Ghana Revenue Authority (GRA) Commissioners of wrongdoing in the famous Labianca case.
Colonel Kwadwo Damoah, a former Commissioner of GRA (Customs Division) and Joseph Adu- Kyei, a former Deputy Commissioner of GRA (Customs Division), were allegedly accused of using their positions to grant favourable tax treatment to Labianca Company, a frozen food firm owned by Jacqueline Buah Asomah Hinneh, a Council of State Member.
The two Commissioners, last year, dragged the OSP to court contending that the OSP’s report had caused damage to their reputation and same had no merit.
The court presided over by Mr Justice William Boampong at the General Jurisdiction (High Court Division) in its ruling awarded cost of GHC 10,000 against the OSP.
The court held that the OSP exceeded its mandate in making its adverse findings against the two Commissioners.
The court noted that OSP acted ultra vires by purporting to ma
ke adverse findings against the Commissioners and further publishing the adverse report in the public domain thereby subjecting the applicants (the Commissioners) to public opinion trial.
It, therefore, quashed certain aspects of the reports relating to the applicants (the Commissioners) and granted an order restraining the OSP from further investigating the two Commissioners in the matter.
Mr Bob Sanyalah, the applicants lawyer, told journalists that he was elated over the ruling of the High Court.
The two Commissioners had gone to court praying it to dismiss the investigative report of the OSP relating to activities of Labianca Company.
Col. Damoah contended that the OSP’s report was targeted at him in person and same was to ‘bring him down’.
In the case of Adu-Kyei, the OSP’s report cited him for issuing unlawful customs advance ruling leading to the reduction of intended imports between the range of five to 10 percent to Labianca.
The two disagreed with the OSP’s report and proceeded to court to con
test the findings.
GNA Court quashes OSP’s report implicating Col Damoah, another in Labianca Case
By Joyce Danso, GNA
Accra, Nov. 27, GNA- An Accra High Court has quashed the Office of the Special Prosecutor (OSP’s) report that accused two former Ghana Revenue Authority (GRA) Commissioners of wrongdoing in the famous Labianca case.
Colonel Kwadwo Damoah, a former Commissioner of GRA (Customs Division) and Joseph Adu-Kyei, a former Deputy Commissioner of GRA (Customs Division), were allegedly accused of using their positions to grant favourable tax treatment to Labianca Company, a frozen food firm owned by Jacqueline Buah Asomah Hinneh, a Council of State Member.
The two Commissioners, last year, dragged the OSP to court contending that the OSP’s report had caused damage to their reputation and same had no merit.
The court presided over by Mr Justice William Boampong at the General Jurisdiction (High Court Division) in its ruling awarded the cost of GHC 10,000 against the OSP.
The court held that the O
SP exceeded its mandate in making its adverse findings against the two Commissioners.
The court noted that OSP acted ultra vires by purporting to make adverse findings against the Commissioners and further publishing the adverse report in the public domain thereby subjecting the applicants (the Commissioners) to a public opinion trial.
It, therefore, quashed certain aspects of the reports relating to the applicants (the Commissioners) and granted an order restraining the OSP from further investigating the two Commissioners in the matter.
Mr Bob Sanyalah, the applicants’ lawyer, told journalists that he was elated over the ruling of the High Court.
The two Commissioners had gone to court praying to dismiss the investigative report of the OSP relating to activities of Labianca Company.
Col. Damoah contended that the OSP’s report was targeted at him in person and same was to ‘bring him down’.
In the case of Adu-Kyei, the OSP’s report cited him for issuing unlawful customs advance ruling leading to the redu
ction of intended imports between the range of five to 10 per cent to Labianca.
The two disagreed with the OSP’s report and proceeded to court to contest the findings.
Source: Ghana News Agency