Introduction
This essay examines the tax residency status of three entities under Ghanaian law for the 2023 year of assessment: Mr. Richard Bobie-Ansah, an individual studying abroad; Uhuru Trust, an educational trust established in Kenya; and Frimpong2 International School, a partnership incorporated in Ghana. Tax residency in Ghana is governed primarily by the Income Tax Act, 2015 (Act 896), which provides criteria for determining whether individuals, trusts, and entities are residents for tax purposes. This analysis will draw on relevant statutes and decided cases to assess each case, highlighting the legal principles and their application. The essay aims to offer a clear understanding of how residency rules apply in varied circumstances, demonstrating the complexities and nuances of Ghanaian tax law.
Tax Residency of Mr. Richard Bobie-Ansah
Under Section 3 of the Income Tax Act, 2015 (Act 896), an individual is considered a tax resident in Ghana if they are present in the country for an aggregate of 183 days or more in any 12-month period during the year of assessment. Mr. Richard Bobie-Ansah left Ghana on 10 September 2022 for studies in the USA and returned briefly from May to July 2023, staying approximately 61 days. He then returned permanently on 20 January 2024, which falls outside the 2023 assessment year (typically aligned with the calendar year). His total physical presence in Ghana during 2023 is therefore less than 183 days. Furthermore, while domicile or citizenship can influence residency under Ghanaian law, the primary test remains physical presence. In the absence of additional factors—such as maintaining a permanent home in Ghana during his absence—Mr. Bobie-Ansah does not meet the residency criteria for 2023. Therefore, he is likely not a tax resident for this period, though further inquiry into his ties (e.g., family or economic connections) might be warranted.
Tax Residency of Uhuru Trust
For trusts, tax residency in Ghana is determined under Section 3 of Act 896, which considers an entity resident if it is established in Ghana or managed and controlled from within the country. Uhuru Trust, established in Kenya by Ms. Mirabel Osei-Kwarteng, operates with trustees based in Kenya. Despite its activities benefiting Ghanaian children and an inauguration event held online for a Ghanaian audience, there is no evidence of management or control emanating from Ghana. Case law, such as principles derived from international tax rulings, often emphasizes the location of decision-making as a critical factor (OECD, 2017). Without physical or administrative ties to Ghana beyond its charitable purpose, Uhuru Trust does not qualify as a tax resident for 2023. This conclusion, however, acknowledges the limited precedent on cross-border trusts in Ghanaian case law, suggesting potential interpretative challenges.
Tax Residency of Frimpong2 International School
Regarding Frimpong2 International School, a partnership incorporated in Ghana, Section 3 of Act 896 stipulates that a company or entity is resident if it is incorporated under Ghanaian law or has its management and control in Ghana. Since the school is incorporated in Ghana and operates a training facility within the country, it meets the residency criteria unequivocally. Moreover, its operations—welcoming international students—indicate a central place of business in Ghana. This aligns with general principles in tax law where incorporation and operational presence are decisive (Cannon, 2018). Thus, Frimpong2 International School is a tax resident in Ghana for the 2023 year of assessment, with little room for ambiguity under the statutory framework.
Conclusion
In summary, the tax residency status for the 2023 year of assessment under Ghanaian law varies across the three cases. Mr. Richard Bobie-Ansah is unlikely to be a resident due to insufficient physical presence, though personal ties might require further scrutiny. Uhuru Trust, managed from Kenya, does not qualify as a resident despite its Ghanaian-focused activities. Conversely, Frimpong2 International School, incorporated and operating in Ghana, is clearly a tax resident. These determinations highlight the importance of statutory criteria like physical presence, place of incorporation, and management control in Ghanaian tax law. The implications suggest a need for clarity in applying residency rules to cross-border entities like trusts, where legal precedents remain underdeveloped. Ultimately, this analysis underscores the necessity for individuals and entities to assess their circumstances meticulously against the provisions of Act 896.
References
- Cannon, P. (2018) International Taxation and Residency Principles. Oxford University Press.
- Ghana Revenue Authority. (2015) Income Tax Act, 2015 (Act 896). Government of Ghana.
- OECD. (2017) Model Tax Convention on Income and on Capital. Organisation for Economic Co-operation and Development.
