- It is not possible to take capital out of the country without taxation

Naalakkersuisoq for Finance and Taxes , Múte B. Egede, has tabled a bill to amend the tax law.

This is done to ensure that capital earned in Greenland is not taken out of the country without taxation.

Naalakkersuisoq for Finance and Taxes , Múte B. Egede, has tabled a bill to amend the tax law.

This is done to ensure that capital earned in Greenland is not taken out of the country without taxation.

Sermitsiaq has asked certified public accountant Per Laugesen from Grønlands Revision A/S to explain the proposal to amend the tax law, and whether it is possible to take capital out of Greenland without taxation.

Per Laugesen explains:

- Since the introduction of the tax law in Greenland, they have operated with the concept of full tax liability (Section 1 of the Tax Act) and limited tax liability (Section 2 of the Tax Act). These concepts are also used internationally.

The basic tax rules

A person is fully liable for tax if the person lives in Greenland. A company is fully liable for tax if the company is registered in Greenland, or if the day-to-day management of the company lives in Greenland. Full tax liability means that a person or company is liable for tax to Greenland of everything you earn in the whole world. Regardless of whether the money is earned in Greenland or abroad.

- That is worth noting here that a foreign company with Greenlandic management (the seat of management) is fully liable to tax in Greenland according to Greenlandic rules.

- That may sound a little strange, but it is to avoid that you just create one company in a tax shelter and earns money in Greenland without taxation in Greenland. The seat of management is also an international term, which is used both in the OECD and the rest of the world.

If a person comes to Greenland and works for a employer in Greenland, but without moving to Greenland, then the person is limited taxable in Greenland. The person must therefore only pay tax in Greenland of the Greenlandic income and not of that person, if any serving in his home country.

A foreign company with a branch or department or a major construction project in Greenland is limited to Greenland of the income earned in Greenland. And here Greenland gets the tax from the part served in Greenland.

- So let me state right away that there is no one who can work in Greenland for a Greenlandic employer or run a business in Greenland and earn money in Greenland, without Greenland also receiving tax on the income at the same time. It is regardless of whether it is a person or a company, and regardless of whether the company is registered abroad or in Greenland, says Per Laugesen.

What happens if you move out of Greenland? Can you take earnings with you, or will Greenland lose the tax something?

- The main rule in tax law is that the time when a person or a company is taxable on an income, is when the person or company becomes entitled to the money (time of vesting).

- That means that it is not possible to postpone when the tax must be collected to postpone the actual payment until later. If it were possible, many would ask to be paid salary or other income after you have moved out Greenland. And then Greenland will lose a treasure. It is not possible after them Greenland tax rules.

What then happens if a company or a person moves out of Greenland? Greenland then loses the tax on earnings in Greenland after the move?

- No. If a person or company moves out of Greenland, it changes tax status from fully taxable to limited taxable. The one part of the company that is still physically located in Greenland gets Greenland still taxed - even after a company has moved out of Greenland. It can too example be a trucking business, construction company, law office, architectural office and so on.

- The one part of the company that is not physical, the new home country gets the tax. Not physical assets can, for example, be securities such as shares, bonds, financial contracts and mortgages. These rules are also consistent with international regulations.

Well, Greenland is being cheated out of taxes the part of the business (not physical assets) which accompanies the person or the company out of Greenland?

- No. For approximately 30 years, we have had a rule in Section 38 of the Tax Act that these securities must be taxed in Greenland when the person or company moves. The physical assets remain in Greenland and Greenland gets the tax on the earnings and assets such as shares, bonds, financial contracts and mortgages get Greenland the tax until the day of the move. Even if the shares, the bonds or the mortgage deeds have not been sold before the move.

- That that is to say, this rule is thus an exception to the main rule that Greenland can only tax an income when it is realized (sold). So neither here, is there any real possibility of moving out of Greenland and getting one unrealized profit with out of the country tax-free.

- Just because a director moves from Greenland to another country, it won't happen any values out of the company. If the director takes any values with him, yes It's theft. And it is punished according to the Criminal Code.

Dividend tax

The country where a company is domiciled for tax purposes, is source country when dividends are paid. It is the source country that has the right to a provisional dividend tax. But where the owner of the company lives, it must also dividend tax is typically paid. Usually, the owner can offset the tax that has been paid in the source country. These rules are also in line with international ones rules.

Well, Greenland does not lose a dividend tax, when a company moves out of Greenland?

- That short answer is no! No dividends are distributed in connection with the move. If a dividend is paid out in a few years, it is correct that Greenland cannot collect dividend tax as source country. The main rule in Greenland is that dividends are deductible. So either a company pays corporation tax or is paid there dividend tax. If a company moves out of Greenland, this rule applies, that dividends are not deductible for foreign companies. So therefore sheep Greenland in practice either corporation tax or dividend tax on the income that is served in Greenland.

- The transferor taxation in section 38 includes only the four forms mentioned, shares, bonds, financial contracts and mortgages. That is, if, for example, you have developed an App or something else that is not physical and that is not fiscal depreciable and which is also not a share, bond, financial contract or a mortgage deed, then there is theoretically a gap in the law.

The proposed changes

In June 2025, a bill was sent to Naalakkersuisut in consultation. The proposal contained a modernization of section 38, so that all assets that moved out of Greenland must be taxed. In addition, it is proposed to introduce a new special liquidation tax of 17-19 percent, even if the company is not liquidated, therefore closed. The liquidation tax is collected, even if the earnings in the company is already taxed in Greenland, and even if the company does not close, but, on the other hand, continues its business in Greenland. And although Greenland continues gets the tax from the earnings in the company after the move.

- But the existing rules are already very finely constructed both internally in Greenland and in relation to other countries' own tax rules and international ones agreements on the avoidance of double taxation.

- They existing rules in Greenland work, and there is no income that can be recorded out of Greenland without taxation, states Per Laugesen from Greenland's Audit.

Grønlands Revision A/S, of which Per Laugesen is a co-owner, has also submitted a consultation response to Naalakkersuisut's consultation on the Proposal for the Inatsisartutlaw on amending the County Council Act on income tax. The hearing took place in June-July 2025.