Ghana
Answer ... The Income Tax Act, 2015 (Act 896) (as amended) regulates Ghana’s tax regime. The tax treatment of the realisation of assets as a result of a change in ownership of an entity through sale, acquisition, merger, amalgamation or reorganisation is provided for under Sections 38(2), 47 and 62 of Act 896.
For an outright sale or acquisition, any realisation that results from the transaction is subject to tax. Where a gain or profit is made, the amount realised will be added to the income and taxed appropriately. However, if there is a loss, the quantum of the loss may be carried forward.
In the case of a merger, a gain on the realisation of an asset that accrues to, or is derived by, a company will be either exempt from or subject to tax depending on the ownership of the asset. The gain is:
- exempt from tax where there is a continuity of at least 50% of the underlying ownership in the asset; and
- subject to tax where there is a continuity of less than 50% of underlying ownership in the asset.
A realisation of assets and liabilities is deemed to have taken place where, within three years, there is a change in the share structure of an entity by more than 50% under Section 62 of Act 896. Tax laws relating to the disposal of assets and liabilities will then apply.
In a transaction which involves the transfer of shares, the company is exempt from stamp duty. However, Schedule 1 of the Stamp Duty Act imposes specific stamp duty rates on the conveyance or transfer of the sale of property.
Where the chargeable income of an individual includes a gain from the realisation of an investment asset not charged elsewhere, the individual can elect that the gain from the realisation of the investment asset be taxed at 15%, as outlined in paragraph 3(a) of the First Schedule to the Income Tax Act.
Ghana
Answer ... At all times in a private M&A transaction, tax consequences will be triggered if the underlying ownership is altered by more than 50%. This is a pointer for structuring deals to avoid paying taxes on the realisation event.
Ghana
Answer ... Currently, there are no tax consolidation provisions in Ghana’s tax regime. Each company is a separate legal entity under Ghanaian law and as such is categorised and taxed differently.
Ghana
Answer ... Under Section 47 of the Income Tax Act, the gains on the realisation of an asset accruing to or derived by a company arising from the amalgamation, reorganisation or merger of a company are exempt from tax where there is continuity of at least 50% of the underlying ownership in the asset. This is a pointer for structuring deals to avoid paying taxes on the realisation event.