- 7 Marks
Question
Staff of ABC Bank Ghana Limited have been issued shares by ABC Bank Limited – United Kingdom (the Parent company). The shares have been vested and are available to be sold immediately by the beneficiary staff.
Requirement:
With the support of the provisions of the relevant tax laws, how will the above be treated for tax purposes, if any?
Answer
Section 63 of the Internal Revenue Act 2000, Act 592 states that the gains or profits from any employment of a person shall be treated as accruing in or derived from Ghana to the extent to which the employment is exercised in Ghana, regardless of the place of payment.
(2 Marks)
Under section 8(3), any amount, allowance, or benefit is a gain or profit from employment if it:
a. Is provided by the employer, an associate of the employer, or a third party under an arrangement with the employer or an associate of the employer
b. Is provided to an employee or an associate of an employee
c. Is provided in respect of past, present, or prospective employment
(3 marks)
Conclusion:
ABC Bank Limited -United Kingdom (the Parent Company) is an associate of ABC Bank
Ghana Limited. Therefore the shares issued to the staff constitute a benefit paid by the
Associate of their employer and should be added to its income and tax appropriately using the
graduated tax rate
- Tags: Corporate Income Tax, Employment Income, Shares, Taxation of benefits
- Level: Level 3
- Topic: Business income - Corporate income tax
- Series: NOV 2015
- Uploader: Kwame Aikins