Continued strong opposition to legislative proposals on evacuee taxation

There continues to be widespread opposition from large parts of Greenlandic business to the Greenland Government's controversial bill on emigrant taxation.

This is shown by a joint consultation response from 14 companies and organizations as well as a consultation response from the Bank of Greenland to an amendment proposal from the Ministry of Finance and Taxation.

The ministry, whose political head is the Minister of Finance and Taxes, Mute B. Egede, IA, sent an amendment to the bill on emigrant taxation for consultation on Friday, January 16.

This followed a series of negative consultation responses from Greenlandic businesses and a number of articles in Sermitsiaq. The consultation deadline for the new proposal was Monday, January 19.

Kitdlak Knudsen will lose buyer

We have gained insight into two consultation responses in connection with the rapid consultation. The consultation responses agree that the proposed amendment does not come close to solving the problems that the business community has already pointed out.

One of the signatories of the joint consultation response is Kitdlak Knudsen, owner of the electrician company Carl Lynge ApS in Nuuk.

He has previously stated in Sermitsiaq that the so-called exit tax could force him to close the business, as there are no buyers for it in Greenland. However, Kitdlak Knudsen has a potential Danish buyer.

However, he has not become more optimistic after seeing the amendment proposal from the Department of Taxes and Finance. The proposal contains an exception for companies that change management through a sale, but it will not include him.

- I have a buyer. He wants me to continue as CEO, so the changes mean nothing to me. The buyer will either have to start by firing me now or pay exit taxes when I retire one day.

- The buyer is therefore not interested in completing the transaction anyway, Kitdlak Knudsen tells Sermitsiaq.

Per Laugesen: - Clearly unreasonable

He is supported by his auditor, Per Laugesen from Greenland Audit.

- The core of the problem is that you still risk being taxed on your entire equity, even if you have not paid a single krone to yourself.

- This is clearly unreasonable and could mean the closure of otherwise healthy Greenlandic businesses, Per Laugesen tells Sermitsiaq.

In the new proposal, the amendment to the tax on emigrants, the Ministry of Finance and Taxes introduces exceptions. They are based on, among other things, illness, study activity, transfer and “similar temporary circumstances”.

In all cases, it is up to the authorities to assess whether the exceptions should apply.

Companies cannot therefore know in advance whether the decisions that are made mean that they may receive a tax bill that, in the worst case, could close the companies, states the joint consultation response.

As mentioned, the joint consultation response has been signed by 14 stakeholders from the business community.

The problem is, according to the consultation response, that the exceptions are unclearly defined and ultimately depend on the authorities' discretion.

- Companies cannot know in advance whether a decision will trigger a massive tax bill. In the worst case, it can threaten the company's existence. This means that a company has to make a decision that could lead to closure and mass layoffs blindly, says Per Laugesen.

Bank: - No investments in case of additional tax

The Bank of Greenland points out in its own consultation response that the amendments to the bill are only exceptions to the original bill regarding illness and foreign investments, where the management is replaced at the same time.

The vast majority of Greenlandic businesses are run by healthy people. If Inatsisartut adopts the amendment, they will continue to face challenges in terms of generational changes and reasons for relocation other than illness. The proposal will cause Greenlandic business owners, also called owner-managers, to invest less in their businesses, the bank believes.

- Many owner-managers only pay themselves reasonable salaries with the intention of using the company's profits to buy new equipment, increase activity or hire more people.

- With the prospect of possible additional taxation and an inflexible step-down towards the time of retirement, there is a risk that the owner-manager increases the salary payment or dividend payment to himself. This will eliminate the investments in Greenland, the Bank of Greenland states in its own consultation response.

Struggles against political coalition agreement According to the joint consultation response from the 14 actors in the business community, it can already be seen today that the desire to establish companies in Greenland is decreasing.

The consultation response cites PET, the Danish Police Intelligence Service, for the fact that more companies are now choosing to establish themselves as branches or permanent establishments rather than Greenlandic companies.

According to the consultation response from the 14 companies and organizations, the bill, even in its amended form, goes directly against the ambitions of the four Greenlandic government parties' coalition agreement to strengthen the business community, simplify the rules and make Greenland more attractive for investments.

In the coalition agreement between Demokraatit, Inuit Ataqatigiit, Siumut and Atattassut states, among other things, the following:

“The economic policy of the Greenlandic Republic must be sustainable and growth-oriented, with a focus on long-term stability and necessary reforms.

“The Sustainability and Growth Plan II is still an important foundation, but must be supplemented with several concrete initiatives that strengthen the business community, make the public sector more efficient, and create fertile ground for investments and a stronger workforce.”

And further it states, among other things:

“To ensure an economically sustainable future, Greenland must attract more private investment and strengthen business development. The private sector must grow larger. Against this background, the coalition will work to implement a targeted tax reform in the business sector that makes it easier and more profitable to do business in this country.”

The agreement was signed in March 2025 by Aqqalu C. Jerimiassen, Atassut, Jens-Frederik Nielsen, Demokraatit, Múte B. Egede, Inuit Ataqatigiit and Vivian Motzfeldt, Siumut.