Ghana: Restricted deferral of unused capital allowances | KPMG | GLOBAL
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Ghana: Restricted deferral of unused capital allowances

Ghana: Restricted deferral of unused capital allowances

There has been a change to the tax policy in Ghana that previously allowed taxpayers to defer and apply unused capital allowances (for instance, depreciation) from the tax year when incurred, to other tax years.


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A provision—section 20—under prior tax law (Act 592, 2000) was repealed by Act 896 (2015). Prior to its repeal, section 20 provided that capital allowances were deductible by a business taxpayer in accordance with the conditions set out in the “third schedule.” There were no specific provisions to support the deferral of unused capital allowances, but in practice, taxpayers deferred unused capital allowances from the year of assessment to other years of assessment. 

The 2015 tax law (Act 896) included a measure requiring taxpayers to claim capital allowances in the year when granted. The provision, thus, does not allow the deferral of unused capital allowances. Still, those capital allowances that cannot be used in the year of assessment may be carried forward through assessed tax losses (if any). Tax losses may be carried forward for: 

  • Three years by entities that are classified under the non-priority sector
  • Five years by entities that are classified under the priority sectors (generally, entities in the business of agro-processing, tourism, information and communication technology, farming, manufacturing, venture capital financing, energy and power, petroleum and mining operations)


Read a September 2016 report [PDF 66 KB] prepared by the KPMG member firm in Ghana: GRA restricts taxpayers from deferring unutilized capital allowances

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