Well-known businessman criticizes special tax

- Why politicians do not a tax or levy on the many Danish and foreign citizens companies that work in Greenland for municipalities, self-governments and private individuals?

That question raises the well-known and successful businessman Martin Gjødvad now in an interview in the Sermitsiaq connection with the debate on Naalakkersuisut's proposal for a special tax law, which Inatsisartut i currently processing.

- Why politicians do not a tax or levy on the many Danish and foreign citizens companies that work in Greenland for municipalities, self-governments and private individuals?

That question raises the well-known and successful businessman Martin Gjødvad now in an interview in the Sermitsiaq connection with the debate on Naalakkersuisut's proposal for a special tax law, which Inatsisartut i currently processing.

Martin Gjødvad, who lives in Denmark, has founded the IT company inu:it, which with 20 employees is Greenland's largest IT company measured by number of employees. Last year, inu:it had a turnover of 60 million kroner.

He also owns the company Inu:it Bolig, whose main activity is the letting of homes. The company develops also real estate projects that are primarily sold to private individuals.

- We hand over every tax kroner we pay to the Greenland Tax Agency, says Martin Gjødvad.

He now joins the chorus of critics who are extremely dissatisfied with the new bill, which has been called a punitive tax Greenlandic companies.

Most recently, the owners of the electrical installation company Carl Lynge, Kitdlak Knudsen, and Auto-og Marine Service, Knud Laursen, criticized the bill.

The critics of the proposal fear that the new law whether special tax affects companies in connection with Danish and foreign investments, generational changes and directors' moves to Denmark.

Risks a tax slap

Inu:it's director has traveled to Denmark on due to illness in the family.

- With this new legislation it is very risky for him to travel back to Greenland. If the director again has to travel down to Denmark, it becomes due there is a special tax of 17 to 19 percent of the equity, which was just over 12 million kroner last year. This corresponds to a tax of up to 2.5 million kroner, says Martin Gjødvad to Sermitsiaq.

He points out that the company's assets are still is in the company and is taxed in Greenland, even if inu:it's director is traveled to Denmark.

- The director take nothing out of the country. That would be theft, says Martin Manure wad.

He points out that inu:it employs and educates many in Greenland.

Gjødvad: - The politicians should think twice

Martin Gjødvad thinks that the politicians have focus on something completely wrong with the bill on special tax on Greenlandic companies.

- Greenland continues to allow Danish companies to come crashing into Greenland as well their consultants and pull the money out of the country. Simply.

- The members of Inatsisartut should think twice before introducing the new tax law. For the special tax gives companies coming from outside a competitive advantage compared to Greenlandic ones companies.

- The politicians the new legislation makes it extremely difficult to run a Greenlandic company in Greenland.

- Man punishes Greenlandic companies and makes it even more lucrative for them companies from Denmark to come here and run with the money, he says.

Distorting the competition

Martin Gjødvad recognizes that tax regulations can be difficult to see and understand.

- But the new tax legislation makes it much more attractive to be a Dane company that has tasks in Greenland. In practice, Greenlanders run the risk companies a special tax, while Danish companies are tax-free in Greenland.

- Danes companies thus have a competitive advantage over Greenlandic companies. It is a distortion of the competition, says Gjødvad.

Consultants from Danish or foreign companies, who have assignments in Greenland, leave no tax behind when they travel again. Neither corporation tax, dividend tax or A-tax, he says.

Proposes tax on Danish companies

- They does not put any money into the community, either in the form of taxes or other local support. All I could do was create a company in Denmark, which then got tasks in Greenland. It's easier and safer, and then I just pay some tax in Denmark.

- But politicians are blind to that. Why doesn't Inatsisartut make a tax or tax, for example of 15 percent for services, the many Danish and foreign companies working in Greenland deliver to municipalities, self-governing and private. It would provide an incentive to establish itself as local business in Greenland that does not have such a tax. It will be simple solution, says Martin Gjødvad.

Have paid DKK 100 million in tax

But with the new Inatsisartut legislature, he doesn't dare hire a new director in one of his two Greenlandic companies.

- What now if the director has to move from Greenland for one reason or another, and I have to find a new director. Then the company risks getting one penalty tax of between 17 and 19 percent of the company's equity. It is crazy, says Martin Gjødvad.

His companies inu:it and Inu:it Bolig pay all tax in Greenland and no tax in Denmark or elsewhere countries.

Martin Gjødvad says that he through the almost 30 years he has run companies in Greenland has paid over 100 million kroner in tax in Greenland. It is in the form of corporation tax and dividend tax and A tax.

- That I am proud of. I do everything to pay all my tax in Greenland and almost pay no tax in Denmark, even though I live in Denmark, he says.

Large housing construction will start soon

Martin Gjødvad reinvests all the money his two companies, inu:it and Inuit:it Bolig, serve in Greenland.

- Me is to build 72 homes on the old KNR site in Nuuk. Everything I works with, takes place in Greenland. I just don't understand what the legislators, the politicians, want to get rid of me and my companies with the special tax they are doing with introducing, asks Martin Gjødvad.

Inatsisartut's Finance and Tax Committee processes the proposal to amend the Income Tax Act on Thursday 18 December. Inatsisartut has the second reading of the bill on February 2.

We have asked Naalakkersuisoq for Finance and Taxes for a comment the article with Martin Gjødvad's criticism. But it has not been possible for a few.

- Naalakkersuisoq for Finance and Taxes, Múte Bourup Egede, has decided that at a later date time an answer will be published on Naalakkersuisut's website.

This is what the Department of Finance and Taxes writes in an email to Sermitsiaq Monday, December 15 shortly after 5 p.m.