UNILEVER GHANA LIMITED VS THE COMMISSIONER-GENERAL, GHANA REVENUE AUTHORITY

 Citation: Unreported Judgement of the High Court (Commercial Division) CM/TAX/0450/2021 dated 20th July 2023.

Brief Facts
Unilever Ghana Limited (the Appellant) filed an appeal against a tax assessment made by the Commissioner-General, Ghana Revenue Authority (the Respondent) on 17th March 2021. The appeal concerns a tax assessment of GH¢6,236,200 issued on 21st February 2019 for the tax period of 2012-2016. The Appellant objected to the assessment on 20th May 2019, to which the Respondent replied on 19th September 2019. The Appellant, dissatisfied with the response, filed the instant appeal with the Court.

Grounds of Appeal

  1. The Respondent did not use a transfer pricing method as required by the Transfer Pricing Regulations, 2012 (L.I 2188).
  2. The Respondent misinterpreted, misunderstood, and misapplied the OECD Transfer Pricing Guidelines in arriving at the tax liability.
  3. Had the Respondent properly applied the OECD guidelines, the Appellant would not have been liable to pay tax on the advertising, marketing, and promotion expenses.

Issues

  1. Whether or not the Respondent correctly applied the transfer pricing method in assessing the tax liability of Unilever Ghana Limited?
  2. Whether or not the Respondent misinterpreted or misapplied the OECD Transfer Pricing Guidelines?
  3. Whether or not the Court have jurisdiction to entertain the appeal, considering that the Appellant filed the appeal outside the statutory time limit?

Areas of Tax Law Considered

  • Transfer Pricing
  • Tax Assessment and Appeals
  • OECD Transfer Pricing Guidelines
  • Jurisdiction of the Court
  • Statutory limitations

Arguments

Appellant (Taxpayer) Argument:

  • Unilever Ghana Limited argued that the Ghana Revenue Authority did not use a valid transfer pricing method and incorrectly applied the OECD Transfer Pricing Guidelines. They argue that the correct application of the guidelines would not result in a tax liability on their advertising, marketing, and promotion expenses.

Respondent (Ghana Revenue Authority)

  • The Respondent filed its submissions based on the grounds of appeal by the Appellant.

Ruling 
The court ruled that the appeal was null and void as the Appellant filed a notice of appeal outside the statutory time limit.

Reasoning

  1. Appeals are conferred by common law or inferred from judicial decisions. They are statutorily conferred and without such jurisdiction, no appeal can lie before an appellate court. To properly invoke such jurisdiction, an appellant must satisfy all the statutory requirements in respect of an appeal. Thus, the right of appeal is provided under section 44 of Act 915 and order 54 of C.I.47, also provides timelines within which such a right would be statute barred, and the court would lack jurisdiction to entertain the action.
  2. After a decision to a tax objection has been made, a person has within four months to file an appeal against the decision. Order 54 rule 2(3) of C.I.47 raises a statutory limit based on this timeline.

Principles for Tax Practitioners

  1. Under section 43(5) Act 915, there is no power of review of a decision made on a tax objection in respect of a tax decision made by the Commissioner General. The law presumes his decision to be conclusive.  Consequently, any further communication after the Commissioner General has given a decision under section 43(5) becomes surplus and legally worthless. An aggrieved person must appeal within the statutory timeline of four months.
  2. The case serves as a reminder for litigants and legal practitioners to exercise diligence and ensure timely filing of appeals to avoid procedural pitfalls that could lead to dismissal of otherwise meritorious claims.

References

Constitutional and Statutory references

  • Constitution of Ghana, 1992
  • Courts Act, 1993 (Act 459)
  • Transfer Pricing Regulations, 2012 (L.I 2188)
  • Revenue Administration Act, 2016 (Act 915)
  • OECD Transfer Pricing Guidelines

Case Law

  • Anin v Ababio and Others  [1973] 1 GLR 509 
  • Bakana Limited v Osei & Another (Civil Appeal No. H1/28/2014) 12 Jun 2014 
  • Doku v Presbyterian Church of Ghana [2005-2006] SCGLR 700
  • Frimpong v Poku [1963] 2 GLR 1-6
  • Koranteng II & Others v KLU [1993-94] 1 GLR 280—298
  • Oppong v Attorney-General & Others  [2017] GHASC 19 (22 June 2017)
  • Republic v. High Court (Financial Division) Accra; Ex Parte Tweneboah Kodua [2015] 81 GMJ 191 SC
  • Republic v High Court, Kumasi, Ex parte Asare-Adjei (Anin Mensah – Interested Party) [2007-2008] 2 SCGLR.