If you take one thing from a real ICAG Advanced Taxation Chief Examiner’s Report, make it this: a £900 million sale, made by a company with zero presence in Ghana, attracted zero Ghanaian tax. Not because of some obscure exemption — because of the single most basic test in international tax, one that a lot of candidates still get backwards. Today we’re breaking down exactly why, and pairing it with a second area the same paper flagged as one candidates skip almost entirely: long-term contract taxation.
Trolex, Vielo, and £900 million
Trolex Ltd is a UK-incorporated company that manufactures watches for the Asian market. It had never done business in Ghana. Then Vielo Ltd, a Ghanaian company, heard about Trolex’s “wonder watches” and placed an order for ten million units — a transaction worth £900 million, on which Trolex stood to make £600,000 profit. Vielo’s management, unsure of the tax position, wrote to the Kaneshie office of the Ghana Revenue Authority to ask.
The examiner’s suggested solution answers in one clean line: “From the information available, the taxpayer is not trading in Ghana but with Ghana. The profit and the payment are therefore not taxable in Ghana.” Neither the £600,000 profit nor the £900 million transfer payment attracts Ghanaian tax.
The test that decides everything
“Trading with Ghana” describes a foreign business that sells into the country from outside — no branch, no office, no staff, no physical operations here. Trolex manufactured in the UK and shipped to a buyer who came to them. “Trading in Ghana,” by contrast, requires an actual operational footprint inside the country — production, management, or a fixed base physically located here. That presence is what triggers Ghana’s taxing right. Trolex had none of it, so despite the size of the deal, Ghana’s answer was a clean zero.
The examiner’s own comment on this question makes the real lesson explicit: “Candidates must make efforts in trying to distinguish between the concepts trading in Ghana and trading with Ghana with their tax implication.” This is not a computation question. There are no figures to reconcile, no allowances to calculate. It is a pure recognition test — read the facts, classify the taxpayer correctly, and the tax answer follows automatically. Candidates who instinctively reached for a withholding-tax calculation on the £900 million payment — reasoning that a transaction that large “must” be taxable — missed the entire point. Transaction size has no bearing on taxability. Presence does.
Long-term contracts: the area candidates skip
The same March 2024 paper opens with a “Notable weaknesses” section that names this directly: “Another area some candidates had challenge was the taxation of long term contracts. The question on how long term contract was taxed was strangely enough, not answered by many candidates.”
Question Four gives you Finstruct Ltd, awarded a GH¢60,000,000 airport terminal construction contract running from January 2022 to December 2023. By the close of 2022, the company had recorded materials cost of GH¢24,485,000 (net of returns and closing stock), wages of GH¢22,157,000, and smaller direct costs, plus an estimated GH¢8,265,180 still needed to finish the job.
The rule, in the examiner’s own words: “Amounts to be included or deducted in calculating the person’s income that relate to a long-term contract are considered based on the percentage of the contract completed during each basis period.” The formula:
Exam Tip: Stage of Completion = (Cost to date ÷ Total cost to complete) × 100
Finstruct’s cost to date of GH¢50,118,320 against a total cost to complete of GH¢58,383,500 gives 85.84% completion. Apply that percentage to the GH¢60,000,000 contract revenue and to total costs, and chargeable income for the year comes to GH¢1,404,342. One formula, applied twice, and the entire question resolves. The examiner’s verdict: “This question was on contract taxation. It is not a very popular area in taxation though… The tax computation was a challenge for most candidates.”
Conclusion
Two different questions, one shared lesson: examiners reward candidates who recognise the category before they touch a single figure. “Is this taxpayer trading in Ghana or with Ghana?” and “Is this a long-term contract requiring percentage of completion?” are both recognition questions, answerable in the opening seconds of reading the facts — if you’ve drilled the test in advance rather than meeting it for the first time in the exam hall.
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