Doing Business in Greenland - Book - Page 16
8.2 Personal taxation
Individuals may be subject to full or
limited tax liability depending on
the length of their stay.
Individuals will not be tax liable in
Greenland if the following conditions are met:
1. The individual remains employed by a foreign employer who
is not tax liable to Greenland,
2. The individual is not resident in
Greenland or
3. The stay does not exceed 14
consecutive days.
8 Tax
The
Greenlandic
Tax
Act
(Inatsisartut Act no. 12 of 2
November 2006) applies to both
individuals and companies.
8.1 Corporate taxation
Both resident and non-resident
Greenlandic companies may be
taxable to Greenland. Non-resident
companies are taxable to Greenland
on business profits derived trough a
permanent
establishment
in
Greenland. E.g. foreign companies
holding a mineral prospecting or
exploration licence is liable to pay
tax in Greenland, and special rules
apply for subcontractors in this
respect.
Corporate tax
25 %
Dividend tax
36 %
Combined corporate
and dividend tax
36 % *
* A unique system applies where dividends distributed are deductable in the
distributing company’s corporate tax payment, providing for the total of corporate
tax and dividend tax amounts to 36%.
If one of the above mentioned
conditions fails, limited tax liability
applies from day 1 with the effect
that income tax is payable on
income earned in Greenland.
An individual who is resident or
stay in Greenland for more than 6
months is subject to full tax liability,
unless a double taxation treaty
applies.
Residence in
Greenland
Depending on the municipality
Residence
outside
Greenland
Employees with no tax liability to Greenland in
the previous 6 months: a flat rate regime (in
general without deductions and allowances)
35 %
Employer's
obligation
Payment of labour market contribution of gross
salary (AMA)
1.1 %
42 - 44 %
The employer must register in the register of employers (Sulinal) no later than 10 days
after paying wages to employees the first time.
8.3 Double tax treaties
Greenland has entered into tax
treaties with Denmark, the Faroe
Islands, Iceland and Norway. Also,
an arrangement deriving from the
Canadian-Danish double tax treaty
is made between Greenland and
Canada. Finally, minor states in the
Caribbean and the English Channel
have
agreed
on
certain
arrangements regarding shipping
and aircraft companies and
taxation of individuals.
8.4 VAT/ import duties
There is no VAT in Greenland.
Import duties are only payable on
certain goods such as cars, alcohol,
cigarettes, food products, etc., and
the rate varies. Hence, there is no
import
duty
on
operating
equipment, but it is under certain
conditions to be declared to the tax
authorities for statistical purposes.
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