Signing of an Agreement on the Avoidance of Double Taxation between the Republic of Ghana and Switzerland

On 23 July 2008, the Swiss Ambassador to Ghana, H.E. Mr. Nicolas Lang, and the Minister for Finance and Economic Planning of Ghana, H.E. Hon. Kwadwo Baah-Wiredu, signed an Agreement on the Avoidance of Double Taxation between Ghana and Switzerland. The Agreement will enter into force after completion of the ratification in both countries.

Since May 2006, the Governments of the Republic of Ghana and the Swiss Confederation have been negotiating an Agreement on the Avoidance of Double Taxation in order to eliminate double payments of taxes on income, on capital and on capital gains. This includes earned income, income from capital, industrial and commercial profits, capital gains, movable and immovable property, business assets, paid-up capital and reserves, and other items of capital.

While the Agreement defines the treatment of the various taxes it also addresses maximum thresholds for a number of taxes. On dividends (mainly incomes from shares), the agreement rules on maximum thresholds of taxes which can under certain circumstances be withheld. They amount to a maximum of 5 to 15%. On interest income, the agreement defines a maximum of 10% of the gross amount of the interest to be taxable if the interest earning party is a resident of the other Contracting State. On royalties or service fees and if the beneficial owner of the royalties or services fees is a resident of the other State, the tax charged shall not exceed 8 per cent of the gross amount of the royalties or services fees.

Already back in 1991, Ghana and Switzerland signed an Agreement on mutual protection of investments. This Agreement together with the today signed Agreement on Avoidance of Double Taxation creates a more conducive environment for Swiss investments in Ghana and Ghanaian investments in Switzerland. A number of Swiss companies are present in Ghana, in particular in the food and services industry. Over the last 10 years, Switzerland's investments in Ghana ranked 4th in terms of investment volume after the USA, Malaysia and Great Britain.

Bilateral Economic Agreements like the one signed today help Ghana further strengthen its economic integration on regional level as well as beyond West Africa where Ghana provides a platform for the access to its neighbouring countries.