Tullow Ghana Wins $320 Million Tax Dispute With Ghana Revenue Authority

• Tullow Oil has won its $320 million Branch Profit Remittance Tax dispute with the Ghana Revenue Authority
• The International Chamber of Commerce ruled that that the Branch Profit Remittance Tax did not apply to Tullow Ghana under its agreement with Ghana
• Tullow's Chief Executive Officer, Rahul Dhir, expressed satisfaction with the Tribunal’s decision

Tullow Oil has won its $320 million tax dispute with the Ghana Revenue Authority at the International Chamber of Commerce (ICC).

The two were contesting the Branch Profit Remittance Tax application on Tullow Ghana's operations.

The ICC Tribunal concluded that the Branch Profit Remittance Tax did not apply to Tullow Ghana under the tax framework stipulated in its Deepwater Tano and West Cape Three Points Petroleum Agreements, which govern operations in the Jubilee and TEN oil fields.

The Branch Profit Remittance Tax is a tax on a foreign business's profits in a country that is remitted to its parent company abroad.

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Reuters reported that Tullow is still discussing with the Government of Ghana to resolve two other tax claims.

Tullow reaction to the ruling

Tullow's Chief Executive Officer, Rahul Dhir, expressed satisfaction with the Tribunal’s decision.

In a statement, he described it as a reaffirmation of the company’s interpretation of the Petroleum Agreements.

“We are delighted with the outcome and decision of the Tribunal, which affirms our assessment and removes a material overhang from our business."

He further emphasised Tullow’s commitment to engaging constructively with the Government of Ghana to resolve two additional tax disputes currently under ICC arbitration.

The two cases relate to loan interest over a decade, and business interruption insurance proceeds it received. Those assessments total $387 million plus penalties.

Why the revenue authority is chasing Tullow

In 2023, Tullow Ghana explained that it received a revised corporate income tax assessment for $190.5 million from the Ghana Revenue Authority in December of 2022.

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Tullow said the revised corporate tax income it received from the Ghana Revenue Authority concerned the disallowance of loan interest for the fiscal years 2010 to 2020.

It further argued that it had previously disclosed assessments by the Ghana Revenue Authority relating to the same issue.

Again, Tullow said the company was sent a tax assessment and demand notice from the GRA for $196.5 million.

Gold Fields, others previously said to be owing the State

YEN.com.gh reported that Gold Fields, Kosmos, and MTN Ghana were among an interesting list of big firms the Ghana Revenue Authority claimed owed the state millions in taxes.

All the firms refuted the claim then, and Kosmos also said it would fight it when the time was right.

The Ghana Revenue Authority was aggressively raising money to pay piled-up debts that have plunged the country into a fiscal and economic crisis.

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Source: YEN.com.gh