Accra, Dec. 28, GNA - Ghana and Germany on Thursday signed an agreement on the avoidance of double taxation by citizens of both countries.

By the agreement, a citizen or a business entity of either country can choose to honour specific tax obligations in one country and would not be required to do so by the other country, irrespective of place of domicile or where business establishment is.

Mr Kwadwo Baah- Wiredu, Minister of Finance and Economic Planning initialed for Ghana and Mr. Peter Linder, German Ambassador initialed for German before exchanging the ratification documents of the "Agreement on Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, on Capital and on Capital Gains" on behalf of their countries.

Mr. Baah-Wiredu said, with the agreement becoming operational in January 1, 2007, Ghanaians working in Germany could chose to honour their tax obligations in Ghana and would not be obliged to pay the same taxes in Germany, and vice versa.

"The convention, in the case of Ghana covers Income Tax and Capital Gains Tax and in the case of the Federal Republic of Germany; the Income Tax, The Corporate Income Tax, the Trade Tax and the Capital Tax.

Nationals of both countries now have the flexibility required to focus on growing their businesses without expending precious time of dealing with complex tax issues in two separate tax jurisdiction," the Finance Minister said.

Mr Baah-Wiredu said Germany was one of Ghana's most important development partners with relationship dating back to the last 50 years.

He thanked the German Government for the support and contributions to key sectors of the economy.

Mr Linder said the agreement signed together with the Agreement on the protection of investments represents the very sound basis for the enhancement of private sector activity and business between the two countries and for German investors intending to come to Ghana.

"With this agreement, out two governments have closed the remaining gap in the legal structure which is decisive for the sound and growing economic relationship between our two countries, based on private sector activity," the German Ambassador said.

He said taxation was always a major issue in making business decisions and hence a sound tax system and a good tax administration were cornerstones for development.

Mr. Linder expressed the hope that the agreement would enhance Ghana-German economic relations from the Jubilee year 2007.

Similar agreements have already been signed with the United Kingdom, France, and the Republic of South Africa. Agreements with Holland and the Czech Republic are in the pipeline to be signed next year, 2007. 

Source: GNA

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