Taxation rules in Greenland

Private
Persons regarded as residents in Greenland are fully liable to pay tax in Greenland on their global income.  Income tax is a flat rate tax between 37%-46% depending on which municipality the person concerned is registered in.

A person present in Greenland for a period of less than six months will be liable to pay income tax when receiving remuneration of any kind from an employment exercised in Greenland, unless the employment is exercised during a stay not exceeding a continuous period of sixty days and the individual concerned is still employed by an employer who is not resident in Greenland. The taxation area is currently undergoing revision.

For updated information, please contact the Department of Taxation at tax@gh.gl

Corporation tax
Basic principles of corporation tax:
Corporation tax is levied at a flat rate of 31,8% and the rate applies to a resident company as well as a registered branch office of a foreign company.  Neither a resident company nor a registered branch office is subject to capital tax. Capital gains subject to taxation are taxed at the same rate as the rate applying to taxable income from business operations.

Calculation of taxable income
Taxable income is determined on the basis of the result shown in the statutory financial statements, adjusted to comply with the prevailing tax provisions. The tax provisions listed below are those most commonly applied in determining the taxable income of a company or a registered branch office.

Tax depreciation and amortization
The permissible rate and method of depreciation/ amortization for tax purposes depends on the asset group being depreciated/ amortized.

Groups of depreciation and amortization
Tax depreciation and amortization can be allocated into three groups: Buildings and related installations are depreciable at a maximum rate of 5% per year calculated on the basis of the acquisition price.

Aircraft and vessels are depreciable at a maximum rate of 10% per year calculated on the basis of the acquisition price. 

All other items, such as machinery, equipment, intangible assets, etc., are depreciated collectively as if they were single composite assets using the pooled declining balance method at a maximum rate of 30% per year.

Special rules apply to leased assets. The sale of assets within this group leads to the remaining balance being reduced by the sales price of the assets sold.  All assets with a value of less than DKK 100,000 are depreciable/amortizable in the year of acquisition.

Amortization of gains
If, on the sale of buildings, vessels and aircrafts, a taxable gain is achieved, the taxpayer may perform a special amortization/ depreciation corresponding to the calculated gain. This amortization may freely be deducted from the balance in one of the three said amortization/depreciation groups, provided, however, that the remaining balance on the group remains positive or DKK zero.

Profit amortization
If the taxpayer has calculated a tax profit, it is possible to make a further tax amortization of 50% of the profit. The amortization may freely be deducted from the balance in one of the three said amortization/ depreciation groups, provided, however, that the remaining balance of the group remains positive or DKK zero. 

Companies with utilization permits under the Mineral Resources Act may in very special circumstances in connection with determination of production costs, etc., obtain exemption from taxation of the activities comprised by the permit.

For further information, please visit
www.nanoq.gl/english/taxation_and_duties_in_greenland.aspx or contact the
Department of Taxation at tax@gh.gl