In a significant ruling, the International Chamber of Commerce (ICC) has sided with Tullow Oil in a $320 million tax dispute with the Ghana Revenue Authority (GRA). The ICC determined that the Branch Profit Remittance Tax (BPRT) does not apply to Tullow's operations in Ghana's Deepwater Tano and West Cape Three Points fields. As a result, Tullow is exempt from the $320 million BPRT assessment and will not face future BPRT liabilities related to these operations.
The arbitration ruling is a setback for Ghana and the GRA, as it denies the country $320 million in expected revenue. The decision also raises broader questions about the fiscal frameworks governing Ghana's oil and gas sector, particularly as the government seeks to attract investment while ensuring fair tax compliance.
Tullow Oil expressed relief at the outcome, stating that the ICC tribunal has confirmed its position on the tax assessments. The company emphasized its continued commitment to working with the Government of Ghana to resolve outstanding disputes amicably.
The dispute between Tullow Oil and the GRA centered on the application of the BPRT, a tax on profits that foreign businesses earn within a country and transfer to their parent companies abroad. Tullow contested the GRA's application of this tax, arguing it was inconsistent with the terms of their Petroleum Agreements and existing tax treaties.
While the ICC ruling is a victory for Tullow, the company is still engaged in arbitration over two additional tax disputes with the GRA. These include the disallowance of loan interest deductions for the fiscal years 2010–2020 and proceeds received under Tullow's Business Interruption Insurance policy for 2016–2019. The combined disputed amount exceeds $387 million, plus penalties.
Tullow has stated its intention to resolve these matters through constructive dialogue, with arbitration proceedings ongoing. The outcome of these disputes will have significant implications for Ghana's oil and gas sector, as well as the country's revenue generation. As the government seeks to balance its need for revenue with the need to attract investment, the Tullow Oil case serves as a reminder of the importance of clear and consistent tax policies.
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