Greenland legal and accounting and tax considerations in 2024

1. On 1 January 2020 corporate income tax for both resident and non-resident companies was lowered to an effective rate of 26.5%. A non-resident company is taxed only on its Greenland based income while a resident company is taxed on its worldwide income. Corporate tax returns must be filed annually no later than four months after the end of the fiscal year;
2. The corporate tax rate levied on companies holding a license under the Mineral Resources Act, as well as oil exploration licensees, is 25%. All companies with mineral and oil exploration licences must also pay a government royalty, the amount of which depends on rates of return and turnover;
3. Gross tax is levied on any project, construction or installation outside of the four main municipalities at the rate of 35%;
4. Greenland resident and non-resident businesses are not required to register for VAT as Greenland is not a part of the EU VAT agreement;
5. A company with net operating losses may carry them forward for five years and write them off against future profits;
6. Withholding taxes are levied at the rate of flat i) 42% to 44% on dividends and ii) 30% on royalties. Furthermore, foreign branches in Greenland suffer no remittance tax;
7. Stamp tax is levied on documents such as real estate deed transfers, real estate mortgage registration and transfer of ships at the rate of 1.5% of the transfer sum;
8. Municipal income tax is levied on taxable income and varies according to the municipality, between 36% to 45%;
9. Capital gains paid from a subsidiary to a foreign parent company are tax exempt;
10. Social security contributions on all employee wages is levied at 0.9%;
11. Greenland has signed 4 double taxation treaties, with Denmark, Faroe Islands, Iceland and Norway;
12. Finally, Healy Consultants will assist the Client with: i) documenting and implementing accounting procedures ii) Implementing financial accounting software iii) preparing accounting records iv) preparing forecasts, budgets, sensitivity analysis and other services.