Auditor warns: - We get some crazy taxation of companies

A controversial bill is currently making its way through the political system. It is a proposal from the Minister of Finance and Taxation, Mute B. Egede, IA, which would tighten tax regulations for companies.

With the proposal to amend the Tax Act, which has been on its first reading in Inatsisartut, the Minister of Finance and Taxation will ensure that capital earned in Greenland is not taken out of the country without taxation.

A controversial bill is currently making its way through the political system. It is a proposal from the Minister of Finance and Taxation of Greenland, Mute B. Egede, IA, which would tighten tax rules for companies.

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

This is the opinion of state-authorized public accountant Per Laugesen from Greenland's largest accounting firm, Grønlands Revision A/S. He is sharply critical of the bill.

- The bill now clearly motivates companies to close. Anything resembling both Greenlandic and foreign investments and generational changes can be taxed at 17 to 19 percent.

- It is an additional tax in addition to the general taxation of companies of 25 to 39 percent and the taxation that has already occurred on the money that has been invested 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, foreign companies will never establish local management in Greenland.

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

- All in all, with the new tax we are hitting some crazy taxation of companies both twice, three times and four times, says Per Laugesen.

Thus, there is a 42 percent tax on funds invested in the company. The income is taxed continuously at around 25 percent. Even if the company is not liquidated, there is a liquidation tax of 17 to 19 percent, and finally there is a 42 percent dividend tax if the owner distributes dividends.

- With Naalakkersuisut's proposal, which Inatsisartut is currently considering, they have clearly stated to all business owners in Greenland, Denmark and abroad that it is not worthwhile to establish a business in Greenland or save money in the business.

- The grotesque thing is that it appears from the comments to the bill that they are practically saying to business owners: Close your business or pay 17-19 percent more in tax, says Per Laugesen.

The Story of Knud

A company must also pay an additional tax of 17-19 percent, a penalty tax, if the management no longer lives in Greenland. This tax is in addition to the tax already paid on the money contributed to the company at the time of its formation or earned in the company subsequently.

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

The company, which has equity of 20 million kroner, will, if the bill is passed in the Parliament, have 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 stay 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.

The Inatsisartut Finance and Taxation Committee will discuss the bill on November 18. It will go to the second reading in the Inatsisartut in early February 2026.