After eight years of the entry into force of Ghana’s first Transfer Pricing (‘TP’) Regulations (‘Old TP Rules’), the Government of Ghana has repealed and replaced the Old TP Rules with new Transfer Pricing Regulations, 2020, (L.I. 2412) hereinafter referred to as the “New TP Rules”.
Per article 11 (7) of the 1992 Constitution of the Republic of Ghana, Legislative Instruments such as the New TP Rules become law after having been gazetted and laid in Parliament for twenty-one Parliamentary sitting days. The New TP Rules, therefore, entered into force in November 2020, a month before citizens of Ghana go to the polls to elect its President and Members of Parliament for the next four years.
The New TP Rules have been enacted to simplify the administration of the law, reduce compliance burden for some eligible taxpayers, and provide clarity on key technical terms. The intention is also to incorporate some of the significant action plans emanating from the work of the Organisation for Economic Co-operation and Development (‘OECD’) on Base Erosion and Profit Shifting (‘BEPS’) schemes by Multinational Enterprises (‘MNEs’).
The Ghana Revenue Authority (‘GRA’) is at the heart of the administration of all tax statutes including the TP Regulations. The GRA has been building a solid TP Unit and administering the old TP Rules since 2012. The deep insights and experiences the GRA gained while administering the Old TP Rules also informed the need to repeal and replace them with the New TP Rules.