a). The constitutional and statutory framework for Double Tax Treaties (DTTs) in Ghana is designed to prevent double taxation, promote international trade and investment, and ensure fair allocation of taxing rights between Ghana and other jurisdictions. This framework is grounded in Ghana’s legal system, drawing from the Constitution, primary legislation, and administrative guidelines.

• Constitutional Framework: Under Article 75 of the 1992 Constitution of Ghana, international treaties, including DTTs, are subject to ratification by Parliament. This article stipulates that any treaty or agreement executed on behalf of Ghana must be laid before Parliament for approval by a resolution supported by at least half of all members. Once ratified, the treaty becomes part of Ghanaian law but is subordinate to the Constitution. This ensures that DTTs align with national sovereignty and fiscal policy objectives. The Constitution also empowers the Executive (through the Ministry of Finance and the Ghana Revenue Authority – GRA) to negotiate such treaties, but parliamentary oversight prevents unilateral executive action.
• Statutory Framework: The primary legislation governing DTTs is the Income Tax Act, 2015 (Act 896, as amended). Section 111 of Act 896 provides for the implementation of international tax agreements, allowing the provisions of ratified DTTs to override domestic tax laws where inconsistencies arise, provided they are beneficial to the taxpayer. This section ensures that treaty benefits, such as reduced withholding tax rates on dividends, interest, and royalties, are applied. Additionally, the Revenue Administration Act, 2016 (Act 915) outlines administrative procedures for tax administration, including the application of treaty benefits. The GRA has issued practice notes and an Administrative Manual on Double Taxation Treaties (released in 2024) to guide the negotiation, ratification, and application processes. This manual details steps like pre-negotiation assessments, drafting based on OECD/UN Models, and post-ratification monitoring.

In practice, Ghana has ratified DTTs with over 10 countries (e.g., UK, France, Germany, South Africa), as listed on the GRA website. These treaties follow the OECD Model Tax Convention, adapted for developing countries, emphasizing source-based taxation. For bankers, understanding this framework is crucial for advising corporate clients on cross-border transactions, ensuring compliance with withholding tax obligations, and structuring deals to leverage treaty benefits, thereby reducing tax leakage and enhancing profitability.

b). The International Swaps and Derivatives Association (ISDA) Master Agreement is a standardized contract used globally for over-the-counter (OTC) derivatives transactions, such as interest rate swaps, currency swaps, and options. It provides a framework to govern multiple trades between parties, reducing legal risks and operational complexities. The main terms include:

• Parties and Definitions: Identifies the counterparties and incorporates the 2006 ISDA Definitions (or updates) for standard terms like “Transaction,” “Confirmation,” and “Event of Default.”
• Single Agreement Concept: All transactions under the agreement are treated as a single agreement, allowing netting of obligations in case of default or termination, which minimizes exposure.
• Payments and Netting: Specifies payment obligations, including gross-up for taxes (to handle withholding taxes) and close-out netting provisions for early termination, calculating a single net amount owed.
• Representations and Warranties: Parties represent their legal capacity, authority, and compliance with laws, including no default under other agreements.
• Covenants: Ongoing obligations, such as providing financial information, maintaining authorizations, and complying with applicable laws.
• Events of Default and Termination Events: Includes failure to pay, breach of agreement, cross-default (default under other debts), bankruptcy, or illegality. Upon occurrence, the non-defaulting party can terminate and calculate termination amounts.
• Early Termination and Close-Out: Details the process for valuing terminated transactions using market quotations or loss calculations.
• Transfer and Assignment: Restrictions on transferring rights without consent, except in specified cases.
• Governing Law and Jurisdiction: Typically English or New York law, with submission to courts in those jurisdictions, though parties can amend via the Schedule.
• Schedule and Confirmations: The Schedule customizes the agreement (e.g., electing automatic early termination), while Confirmations detail specific trade terms.
• Multibranch and Credit Support: Provisions for dealing through branches and annexes for collateral (e.g., Credit Support Annex for margining).

In Ghanaian banking, ISDA agreements are used in treasury operations for hedging risks, aligned with BoG’s foreign exchange guidelines. Banks like Ecobank Ghana incorporate them in syndicated loans with swap components, ensuring compliance with Act 930 and reducing counterparty risks post the 2017-2019 banking cleanup.