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Business News of Monday, 10 March 2008

Source: GNA

Ghana and Netherlands sign treaty on double taxation

Accra, March 10, GNA - Ghana and the Netherlands on Monday signed a treaty on the avoidance of double taxation and fiscal evasion that would facilitate cross-border trade and investment through the elimination of tax impediment to cross-border flows.

The treaty, which is the eighth to be signed by Ghana and its development partners, is expected to take effect from January 2009 after approval from the Dutch Parliament. The Ghanaian Parliament has already ratified it.

Dr Anthony Akoto Osei, Minister of State, Ministry of Finance and Economic Planning, signed for Ghana while Mr Jan Kees de Jager, State Secretary of Finance, Netherlands initialled for his country after which they exchanged the power of attorney.

Dr Osei explained that negotiations on the treaty started in December 2006 in The Hague while the concluding rounds were held in Accra in February 2007.

He said the treaty would enable the two countries to achieve the elimination of double taxation, prevention of fiscal evasion, elimination of discrimination against foreign nationals and non-residents in trading activities.

"The treaty is therefore meant to create an enabling environment for foreign direct investment inflows into Ghana and Netherlands. It is also expected to increase trade between the two countries for our mutual benefit and also broaden and deepen bilateral relations between the two," he said.

The Minister said Netherlands had been playing a pioneering role in donor harmonization activities and was a major contributor to the Multi-Donor Budget Support (MDBS) facility.

Mr de Jager commended Ghana, a "relatively young country" for being able to conclude numerous double taxation treaties with countries all over the world.

"In my view it forms a great example of how a developing and a developed country are able to come to a solid agreement that does justice to the characteristics of both countries."

He said such a treaty was an important prerequisite for the promotion of mutual investments and trade between two countries. The Minister said a tax treaty not only helped to prevent double taxation and double non-taxation but also provided certainty to companies, organizations and individuals on the fiscal treatment of their income and capital gains from the countries involved.

Mr de Jager said Ghana and the Netherlands would benefit greatly from the treaty which they had signed, explaining that it would significantly reduce the administrative burden relating to the taxation of income and capital gains, both for taxpayers and respective tax administrations.

On the other hand, it contributed to creating the conditions for sound public finance which is vital for the economic growth of a developing country, he said.

He invited a delegation of the Ghanaian tax administration to visit the Netherlands to learn more about their day-to-day practice in the administration and customs departments.

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