Ghana and the Kingdom of Morocco have signed a Double Tax Agreement (DTA) to foster bilateral trade and investment between the two countries.
The move, which will come into effect in 2018, is expected to increase trade and investment between the countries by some large volumes.
Statistics from the International Trade Centre, show that Ghana’s export to Morocco as at 2015 was around $3.6 million, less than 1per cent of the country’s total export, whilst imports from Morocco for the same period stood at US$64 million.
It is expected that once the DTA comes into force, the value of trade between the two countries could potentially increase as it will encourage businesses from both sides to venture out.
The bilateral relationship between Ghana and Morocco was further deepened earlier with year, following the visit of King Mohammed VI, The King of Morocco to Ghana in February.
During this visit, 25 economic and trade co-operation agreements between Morocco and Ghana were signed. Five of these agreements related to governmental business, while the remaining twenty were Public-Private Partnership Agreements, of which the DTA between Ghana and Morocco, is one of such agreements that were signed during the King’s visit.
Elimination of double taxation
When the DTA becomes effective, the incidence of double taxation of income of Ghanaian residents will be eliminated by the grant of a foreign tax credit to such residents of Ghana, on tax suffered on income derived from Morocco.
In the case of dividends paid by a Moroccan resident company to a Ghanaian tax resident who controls at least 10 per cent of the capital of the Moroccan company, a tax credit shall take into account (in addition to any tax for which the credit may be allowed).