In relation to two contested tax assessments it received from the Ghana Revenue Authority, Tullow Ghana Limited (TGL) has filed petitions for arbitration with the International Chamber of Commerce in London, according to a statement from Tullow Oil Plc (GRA).
The oil company informed investors of the assessments in a notice, stating that they are related to Tullow Oil Plc's revenues from its Corporate Business Interruption Insurance policy and the disallowance of loan interest deductions for the fiscal years 2010 through 2020.
The arbitration petitions have been made in compliance with the procedures for resolving disputes outlined in the Petroleum Agreements, which control TGL's operations in Ghana.
On the website of the Ghana Petroleum Register, a copy of the petroleum agreements may be accessed.
Background
Tullow Oil Ghana claims that it was issued a revised corporate income tax assessment by the GRA for $190.5 million in relation to the disallowance of loan interest for the fiscal years 2010 through 2020.
Regarding the same problem, Tullow had previously released GRA assessments; the updated assessment obtained in December 2022 replaces all earlier assertions.
As previously mentioned in Tullow's Trading Update on January 25, 2023, TGL has also received a new corporate income tax assessment and demand notice from the GRA for $196.5 million in relation to proceeds received by Tullow during the fiscal years 2016 through 2019 under Tullow's corporate Business Interruption Insurance policy.
GR and tax disagreements
Tullow's action comes in response to similar worries raised by other global corporations, particularly in the extractive industry.
In a recent announcement, GRA stated that it had decided not to follow further with the $773 million "back tax" bill it had levied on the telecommunications business.
In a statement, the authority also urged businesses that disagree with the assessment to raise their issues with its Tax Advisory Board and other channels.
Branch profit remittance tax dispute
Tullow had already submitted an arbitration request in relation to a different assessment for $320 million in Branch Profits Remittance Tax in 2021. On October 20, 2023, there will be a hearing about this matter.