The International Arbitration Court in London is preparing to deliver its decision on the ongoing tax dispute between the Ghana Revenue Authority (GRA) and Tullow Oil, a case that involves a $400 million tax assessment. In a Trading Report released on November 29, 2024, Tullow Oil confirmed that the court’s verdict is expected before the end of the year.

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The dispute stems from tax issues related to Tullow’s operations in Ghana, with the GRA seeking a substantial tax payment from the oil company. Both sides have presented their arguments, and the case is now in the hands of the court, which conducted hearings in October 2023, and gathered all necessary information.

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Earlier this year, Tullow’s CEO, Rahul Dhir, highlighted the potential impact of the court's ruling, warning that it could significantly affect the company’s financial health and operations. “Management has thoroughly assessed the potential results based on legal counsel, tax advice, and prior experience with similar cases,” Dhir said.

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Background to the dispute The legal dispute between Tullow Oil and the Ghana Revenue Authority (GRA) dates back to October 2021, when Tullow Ghana Limited (TGL) challenged a $320.3 million Branch Profits Remittance Tax (BPRT) imposed following a tax audit for the 2014 to 2016 fiscal years. Tullow’s response included filing additional arbitration claims with the International Chamber of Commerce in London in February 2023.

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These new claims questioned two more tax assessments from the GRA, one regarding the disallowance of interest deductions on loans from 2010 to 2020, and the other concerning funds received under Tullow’s corporate Business Interruption Insurance policy for the period 2016 to 2019. Tullow argues that the GRA’s application of the BPRT is inconsistent with the company's petroleum agreements and the applicable double tax treaties.

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According to Tullow, the assessments do not align with the legal framework that governs its operations in Ghana. With the case still pending, Tullow is not currently obligated to make payments on the disputed tax charges.

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