Real-Time VAT on cross-border digital services – not a new tax, does not violate double taxation principle: What every stakeholder must know
Introduction Ghana’s digital economy has grown faster than its traditional VAT collection mechanisms. In 2022, only a few non-resident e-commerce entities were on the GRA’s radar. Today, about 167 non-resident e-commerce businesses are registered, mobilising an average of GH¢43 million monthly and contributing an estimated GH¢515 million in VAT annually. Yet a significant VAT gap … The post…
In Ghana, the digital economy has experienced rapid growth, with 167 non-resident e-commerce businesses now registered and generating an estimated GH¢515 million in VAT annually. However, a VAT gap persists, prompting the Ghana Revenue Authority (GRA) to launch a VAT compliance campaign. One of the key measures is the introduction of Real-Time Value Added Tax (RTVAT) powered by the Sentinal® system. This article outlines what every stakeholder must know about RTVAT.
RTVAT is not a new tax, but a mechanism that collects the VAT already due on qualifying cross-border digital service transactions in real time. To be in scope, a transaction must meet three conditions: a Ghana-issued payment instrument, a non-resident merchant, and electronic service delivery. Both registered and non-registered non-resident digital service providers are in scope.
Customers and taxpayers can continue using their normal payment channels without changes. The VAT is collected via participating payment platforms, with the VAT component deducted automatically and remitted to the GRA. The VAT rate is 20%, which includes a 15% VAT and a 5% combined levy for GETFund and NHIL. No double VAT payment occurs, as merchants displaying prices exclusive of VAT notify customers of the VAT at the point of payment.
For non-resident digital service providers, the policy remains unchanged: they must register for VAT, display prices exclusive of VAT, and notify customers of the VAT charge at the point of payment. Participating financial institutions, including banks, payment service providers, electronic money issuers, and third-party payment providers, must integrate with the RTVAT Framework to collect and remit the VAT.
This reform aims to ensure fairness, timeliness, accuracy, transparency, and level the playing field for all digital businesses.
Written by urgent.news from Ghanaian Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
