May 2021 Q2 c.
As part of measures to fight back base erosion and profit shifting, Parliament of Ghana has legislated against profit splitting.
Required:
Evaluate the impact of income splitting as an anti-tax avoidance measure. (4 marks)
View Solution
Under section 32 of Act 896 Act 2015, where a person attempts to split income with another person, the Commissioner-General may, in writing to that person, prevent a reduction in tax payable. The provision allows the CG to adjust any arrangement that is of income splitting nature to protect revenue.
This is very impactful if the CG gets wind of the arrangement and re-characterises the income accordingly.