Beiersdorf Gh. Ltd. imports and distributes Nivea skin care products from the parent company based in Germany, Beiersdorf AG). The tax authorities, CGRA, had issued an assessment where deductions for royalty payments to the German parent had been denied (non recognition – not legitimate business cost). Furthermore, alledged product discounts paid to third party vendors  had been characterized as sales commissions subject to withholding tax of 10%. Beiersdorf contended the assessment and filed an appeal. The appeal was based on three main grounds: The finding of CGRA that royalty payments made by the Appellant to Beiersdorf AG (BDF) pursuant to an agreement between Appellant and BDF for the use of the Nivea brand should not be allowed as a legitimate business cost because of the failure of the Appellant to comply with prior registration of the Royalty Agreement with the Ghana Investment Promotion Center is wrong in law. The finding of CGRA imposing liabilities with respect to withholding tax is wrong in law. The decision of the CGRA to characterize reimbursements paid to the distributor of Appellant for work done by third party vendors as sales commission paid to the distributors for which a withholding tax of 10% should apply is wrong in law. The decision of the CGRA to disallow Trade Discount and to treat Trade Discounts offered to the distributors of the Appellant as commission payment which should attract a withholding tax of 10% is wrong in law. The Appeal was dismissed by the High Court of Ghana. “It is the opinion of the court therefore that once the Distribution Licence Agreement is a technology transfer agreement, the appellant should have registered the said agreement as required by the Ghana Investment Promotion Centre Act, 2013, Act 865. It was therefore within the remit of the respondent to treat the said royalty fees or payments by the appellant as part of the profits of the appellant and impose the relevant taxes on them. The appellant fails on this ground of appeal which is therefore dismissed.“ “The court finds this ground of appeal to be very lame indeed. This is so because it seeks to imply that once these payments are meant as reimbursement to the so-called Distributors for the cost of the display/show cases, they should not attract withholding tax. However, in actual fact they are payments for services rendered by artisans described as tradesmen and if they had been paid directly to those artisans the payments would have been subject to the deduction of withholding tax. In the opinion of the court therefore, the obligation of the appellant to withhold tax on those payments are not taken away by the mere fact that the payments are rendered through people described as Distributors.“ “In the opinion of the court if it is true that the appellant gave trade discounts to its customers in order to boost its sales,  then the said trade discount  must be clearly stated on the VAT invoices issued to the customers. In the instant action, the respondent conducted a tax audit of the books and other documents kept by the appellant and came out with a finding that the VAT invoices do not show that customers of the appellant have benefitted from any trade discount given by the appellant.“ ...