We are disappointed in ICC’s ruling over our corporate income tax assessment in Ghana – Tullow Oil

The Arbitration for International Chamber of Commerce in London has ruled in favor of the Government against Tullow Oil over about US$400 million tax charge. For some, the ruling should mean that the Government of Ghana can now go ahead and let Tullow pay the almost US$400 million tax charges on some loan interest deductions and corporate insurance issues. Tullow Oil took up the issue to the tribunal in London, arguing that the charge by the Ghana Revenue Authority breached Ghana’s Petroleum Agreement.

However, the Tribunal ruled in favour of Ghana, saying its action was within the law. Earlier this year, the Tribunal had rulings by the court in its favour. However, it is not clear for now if the Government of Ghana may move to enforce this ruling due to the possible impact on Tullow oil and its operations in Ghana.

An international arbitration tribunal in London has ruled in favour of the Government of Ghana in a nearly $400 million tax dispute involving Tullow Oil Ghana. Joy Business understands from persons familiar with the ruling that the tribunal rejected Tullow Oil’s challenge to the tax assessment imposed by the Ghana Revenue Authority (GRA). The dispute centres on tax charges relating to deductions on certain loan interest and corporate insurance arrangements.

Tullow Oil had taken the matter to the international arbitration tribunal, arguing that the GRA’s tax assessment breached Ghana’s Petroleum Agreement with the company. The company also challenged the application of the penalties associated with the assessment. However, the tribunal is understood to have ruled that the government’s action was within the law, potentially clearing the way for Ghana to pursue payment of the disputed amount.

The ruling could therefore have significant financial implications for Tullow Oil, which remains a major operator in Ghana’s upstream petroleum sector. Tullow had earlier secured rulings in its favour in aspects of the dispute. The latest decision, however, represents a setback for the company in the nearly $400 million tax matter.

It is not immediately clear how the Government of Ghana intends to enforce the latest ruling, or what the potential implications of any payment would be for Tullow Oil’s operations in Ghana. The development is expected to attract attention given the size of the tax claim and its potential implications for government revenue and the company’s operations in the country. Tullow Oil has described as disappointing the decision by the International Chamber of Commerce in London over its corporate income tax assessment covering its operations in Ghana from 2016 to 2019.