STP – Aug 2016 – L2 – Q2 – VAT on Imports

Discuss taxable value for VAT on imported goods and services.

Question

VAT is chargeable on imports. The basic information required to facilitate the VAT charge on imported goods and services is the value of the goods or services. At a recent meeting organized by the Ghana National Chamber of Commerce and Industry to educate members on the taxable value for determining the VAT on imported goods and services you, as a renowned tax consultant, were invited to discuss this issue.

The topic you are to speak on is “What is the taxable value for determining the VAT on imported goods and services.

Required
a) As the preferred consultant, please present to the Chamber a discussion paper on the taxable value for determining the VAT on imported goods and services.

b). Also indicate in your presentation the procedures that must be followed before payment of VAT on the import of services is made.

Answer

a) The value for determining the tax chargeable on taxable imports of goods is;

i. The import value of the goods calculated in accordance with Act 1993

ii. Import duties and taxes other than the tax

iii. CIF value if not included in.

b) Value for an import of services is the amount of the consideration for the import.

c) The value of the import of services is the open market value

i. An import of service is made for no consideration or fr a consideration that is less than the open market value of that import, and

ii. The supplier and recipient are related persons

d) Where a portion of the price of an import of service represents tax imposed by the Act, the value of the import is the price reduced by an amount equal to the tax fraction multiplied by that price.

b). Payment of tax on import of services

Where tax is payable on import of services, the person liable for the tax is required to
a. Furnish the CG with the service import declaration, and
b. Pay the tax due in 21 days after the tax period in which the services were imported.
A service declaration shall;
a. Be in the form prescribed by the CG,
b. State the information necessary to calculate the tax payable in respect of the import, and
c. Be furnished at the and in the manner prescribed by the CG.

Tags: GRA, Import Services, Payment Procedures, Tax Compliance, VAT
Level: Level 2

Topic: Strategic Indirect Tax Management
Series: AUG 2016

Uploader: Samuel Duah