Auditor warns: - We get some crazy taxation of companies

A controversial bill is these days on the way through the political system. This is a proposal from naalakkersuisoq for finance and taxes, Mute B. Egede, IA, who wants to tighten the tax rules for companies.

With the proposal to amend the Tax Act, which has been for 1st processing in Inatsisartut, the finance and tax minister will ensure that capital earned in Greenland is not taken out of the country without it taxation.

A controversial bill is these days on the way through the political system. This is a proposal from naalakkersuisoq for finance and taxes, Mute B. Egede, IA, who wants to tighten the tax rules for companies.

With the proposal to amend the Tax Act, which has been for 1st processing in Inatsisartut, the finance and tax minister will ensure that capital earned in Greenland is not taken out of the country without it taxation.

The country's government is in the process of introducing tax rules that will have a lot of inappropriate consequences.

Certified public accountant Per believes so Laugesen from Greenland's largest audit firm, Grønlands Revision A/S. He directs sharp criticism of the bill.

- The bill now clearly motivates businesses to close. Anything reminiscent of boats Greenlandic and foreign investments and generational changes can remain taxed at 17 to 19 percent.

- That is an additional tax in addition to the regular taxation of companies of 25 to 39 percent and the taxation that has already occurred on the money that has been put in the company, says Per Laugesen.

Foreign companies will be gone

He points out that if Greenland introduces an additional tax of 17 to 19 percent, foreigners come companies never to establish a local management in Greenland.

The Greenlandic subsidiary risks being hit by 17 to 19 percent tax, for example if the director resigns and a replacement must be hired from the parent company in Denmark or abroad until a new local management is found in Greenland. He describes this as grotesque.

- All in all, we hit the mark with it new tax into some crazy taxation of companies both two, three and four times, says Per Laugesen.

There is thus 42 percent tax on funds deposited into the company. The income is continuously taxed by around 25 percent. Even if the company is not liquidated, there is a liquidation tax of 17 to 19 percent, and finally there is 42 percent dividend tax, if the owner distributes dividends.

- With Naalakkersuisut's proposal, which Inatsisartut is currently processing, then they have i at least clearly stated to all business owners in Greenland, Denmark and abroad, that it is not worthwhile to establish a company in Greenland or to save up in the company.

- That grotesque is that it appears from the comments to the bill that one almost says to business owners: Close your business or pay 17-19 percent more in tax, says Per Laugesen.

The story about Knud

A company must also pay 17-19 percent in additional tax, a penalty tax if the management does not live in Greenland longer. This tax is in addition to the tax already paid on the money that is invested in the company at the time of foundation or which is earned in the company subsequently.

Last month we told the story of Knud Laursen, director and principal owner of Auto og Marine Service Center, AMS, in Maniitsoq.

The company that has a equity capital of DKK 20 million, will, if the bill is adopted in Inatsisartut, get a tax bill of around three million kroner. Knud Laursen has had to move to Denmark while he is being treated for cancer at Aalborg University Hospital.

Knud Laursen wants to remain living in Denmark for the time being, perhaps one to two years, while the treatment takes place, as he does not want to joke with his health, as he says.

Inatsisartut's Finance and the Tax Committee will discuss the bill on 18 November. It comes to 2. treatment in the Inatsisartut at the beginning of February 2026.