GHANA: High Court rules that payment of minimum disputed amount is a prerequisite for filing an appeal
by Renier van Rensburg
The Commercial Division of the High Court, in its decision of 13 July 2018, in the case of Beiersdorf Ghana Limited v. The Commissioner General of the Ghana Revenue Authority (CM/TAX/0001/2018), ruled that the payment of at least a quarter of the tax liability contained in a disputed notice of assessment in the first quarter of the year of assessment is a prerequisite for filing a tax appeal in accordance with Rule 4 of Order 54 of the High Court (Civil Procedures) Rules 2004.
In the case at hand, the Ghana Revenue Authority (“GRA”) conducted a tax audit on Beiersdorf Ghana Limited (“BGL”) and issued an additional tax assessment, disallowing royalty payments made in accordance with a distribution licence on the basis that the agreement was not registered as a technology transfer agreement with the Ghana Investment Promotion Centre (“GIPC”).
BGL objected on the basis that the distribution licence agreement is not a technology transfer agreement as contemplated by the GIPC Act (Act 865) and was, therefore, not required to be registered with the GIPC. BGL also disagreed with the GRA recharacterising reimbursements paid to its distributors for work done by third-party vendors as sales commission and subjecting such payments to withholding tax.
The GRA subsequently issued a revised assessment taking into consideration tax credits to which BLG was entitled, but BGL disagreed with the revised assessment and filed an appeal with the High Court.
The High Court ruled in favour of the GRA on the basis that it was precluded from hearing the appeal because BGL failed to provide evidence of the payment of at least a quarter of the tax due in the notice of appeal and hence, the appeal was not properly filed.
