Tullow drags GRA to international arbitrator over US$387 tax dispute

Tullow Ghana Limited (TGL) has dragged the Ghana Revenue Authority (GRA) to the International Chamber of Commerce over a tax dispute.

Tullow Ghana filed a request for arbitration at the London-based International Chamber of Commerce in respect to two disputed tax assessments received from the GRA. The assessments relate to the disallowance of loan interest deductions for the fiscal years 2010 – 2020 and proceeds received by Tullow Oil plc under its corporate business interruption insurance policy.

In a statement, the company said the two disputed tax assessments, which total $387 million plus penalties, breach TGL’s rights under its petroleum agreements. “The requests for arbitration have been filed in accordance with the dispute resolution process set out in the Petroleum Agreements which govern TGL’s activities in Ghana”.

“Tullow believes that resolution through international arbitration will bring certainty, which is in the best interest of all stakeholders. Notwithstanding this formal step, Tullow intends to continue to engage with the Government of Ghana, including the GRA, with the aim of resolving these disputes on a mutually acceptable basis,” the statement added.

Background

TGL received a revised corporate income tax assessment for US$190.5 million from the GRA relating to the disallowance of loan interest for the fiscal years 2010 – 2020. Tullow has previously disclosed assessments by the GRA relating to the same issue; the revised assessment received in December 2022 supersedes all previous claims.

TGL said it also received a new corporate income tax assessment and demand notice for US$196.5 million from the GRA relating to proceeds received by Tullow during the fiscal years 2016 – 2019 under Tullow’s corporate business interruption insurance policy, previously referred to in Tullow’s Trading Update on 25 January 2023.

Branch profits remittance tax arbitration

Tullow has previously filed a request for arbitration in respect of a separate assessment for branch profits remittance tax of US$320 million in 2021. A hearing in respect of this dispute is scheduled for October 2023.

source: thebftonline.com