Taxation of Investment Income and Withholding Tax

These flashcards cover key concepts from the lecture on taxation of investment income and withholding tax, focusing on definitions, exclusions, types of taxes, and specific rates.

What is defined as investment income for taxation purposes?

Investment income includes dividends, interest, annuity, natural resource payments, rent, royalties, gains from realized investment assets, and winnings from lotteries.

What are some exclusions from the determination of investment income?

Exclusions include final withholding payments and amounts included in employment or business income.

What is a withholding tax?

A withholding tax is an amount of income tax withheld at source from specified payments to resident and non-resident persons under the Income Tax Act 2015.

What are the two types of withholding taxes under Ghana law?

The two types are Final Tax and Payment on Account.

What is the withholding tax rate for dividends under Ghana tax law?

The withholding tax rate for dividends is 8%.

What is the time frame for a withholding agent to pay the withheld tax to the Commissioner?

Withholding tax must be paid within fifteen days after the end of the month in which it was withheld.

What is the penalty for a withholding agent who fails to withhold tax?

A withholding agent who fails to withhold tax is personally liable to pay the amount of tax that has not been withheld.

What is the withholding tax rate for natural resource payments and royalties?

The withholding tax rate for natural resource payments and royalties is 15%.

What should a withholding agent submit regarding tax withheld?

The agent must submit a return or details concerning the payment.

What are some examples of amounts included in investment income?

Amounts include gifts received related to the investment and any amount required under taxation of shareholders.