The Ghana Investment Promotion Centre (GIPC), as part of its ‘Ghana on the Go CEO’s breakfast meeting’, hosted CEOs and Business leaders to discuss laws and sanctions that come with Technology Transfer Agreement.
The Technology Transfer regime relates to a relationship between a parent company or an external company and an indigenous company or subsidiary where there is provision of some service from the external company to the company located here in Ghana, and therefore there is an expectation that those services must be paid for.
According to the CEO of the GIPC, Mr. Yofi Grant, the GIPC’s laws state that any such agreement must be registered with the GIPC. He said: “This is to ensure you comply with the law that regulates it and ensure you pay the right amount.
“However, it’s been an area of sometimes-abuse from companies outside who provide some services to companies here and are able to use us to take out more money than they are deemed for. So, it’s important to make sure that the regulation and what its purported to do is understood.”
He noted that the list of goods and services indicated in the Technology Transfer Agreements are many, and sometimes make room for the issue of transfer pricing to occur.
“The agreement is usually between the parent company and local subsidiary, but they have to be registered at the GIPC because the transfer pricing also indicates that if there is a service provided by the foreign company to the local one, the pricing should not exceed what an independent company would charge,” said Mr. Grant.
He advised the companies involved to first of all register any such relationships, even if it’s a loan from the parent to the local company to ensure that no transfer pricing occurs. He also admonished they comply with the laws that have to do with a transfer pricing agreement.
“Many of the indigenous companies’ contract services with either their parent companies or other foreign companies, and therefore they are charged for services – but then, somebody needs to sit down to make sure what they are being charged for is the right thing and the right amount,” he said.
Mr. Grant announced that the GIPC is working together with the Ghana Revenue Authority and Bank of Ghana to ensure banks do not transfer any monies for any such services without a Technology Transfer Agreement.