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Ghana-Morocco

Tax Treaty between Ghana and Morocco has Entered into Force — Orbitax Tax News &
Alerts

The income tax treaty between Ghana and Morocco entered into force on 18 October
2022. The treaty, signed 17 February 2017, is the first of its kind between the two
countries.

Taxes Covered

The treaty covers Ghana income tax, and Moroccan income tax and corporation tax.

Service PE

The treaty includes the provision that a permanent establishment will be deemed
constituted when an enterprise furnishes services through employees or other
engaged personnel if the activities continue for the same or connected project
within a Contracting State for a period or periods aggregating more than 6 months
within any 12-month period.

Limited Force of Attraction Provision

Article 7 (Business Profits) includes a limited force of attraction provision

whereby taxing rights are granted to a Contracting State on profits attributable to
the sale of goods or merchandise by a resident of the other State if the same or
similar goods or merchandise are sold through a PE maintained by that resident in
the first-mentioned Contracting State. The same applies for other business
activities carried on in a Contracting State by a resident of the other State if
the same or similar activities are carried on through a PE.

Withholding Tax Rates

Dividends - 5% if the beneficial owner is a company directly holding at least 10%

of the paying company's capital; otherwise, 10%
Interest - 10%, with an exemption if the recipient of the interest is the central
bank, the government, a political subdivision, or local authority of a Contracting
State
Royalties - 10%
Fees for Technical Services (managerial, technical, or consultancy) - 10%
Capital Gains

The following capital gains derived by a resident of one Contracting State may be
taxed by the other State:

Gains from the alienation of immovable property situated in the other State;
Gains from the alienation of movable property forming part of the business property
of a permanent establishment in the other State; and
Gains from the alienation of shares of the capital stock of a company, or of an
interest in a partnership, trust or estate, the property of which consists directly
or indirectly principally (exceeding 50%) of immovable property situated in the
other State (not applicable where the immovable property is used by such company,
partnership, trust, or estate in its business activities).
Gains from the alienation of other property by a resident of a Contracting State
may only be taxed by that State.
Double Taxation Relief

Both countries apply the credit method for the elimination of double taxation. In
addition, for dividends received by a Ghana resident company that holds at least
10% of the paying company's capital, Ghana will also provide a credit for the tax
payable by the company in respect of the profits out of which the dividends are
paid. A provision is also included for a tax sparing credit for tax that has been
waived or reduced in a Contracting State in accordance with the laws of that State
for tax incentives.

Effective Date

The treaty applies from 1 January 2023."

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