background image
4.2. Domestic PE of a Foreign Entity

The Income Tax Act of Ghana defines a permanent establishment (‘PE’) as:

a) a place in the country where a non-resident person carries on business or that is at the disposal of the person for that purpose;

b) a place in the country where a person has, is using, or is installing substantial equipment or substantial machinery;

c) a place in the country where a person is engaged in a construction, assembly or installation project for 90 days or more, including a place where a person is conducting supervisory activities in relation to that project;

d) the provision of services in the country; and

e) a place in the country where an agent performs any function for the business of a non-resident person, including (a) in the case of insurance companies the collection of premiums or the insurance of risks situated in Ghana, but (b) excluding cases involving a general agent of independent status with its own separate legal personality acting in the ordinary course of his business.

The Ghana Tax Act provides for a force of attraction principle whereby if a non-resident person conducts business in Ghana through a PE and in parallel also sells goods or merchandize that are similar in nature to the goods or merchandize sold or conducts a business which is similar in nature to the business conducted by the PE, then any income derived from such sales or business are attributed to the PE and taxable in Ghana.