Verified Facts
The tax rates in Greenland range from 36% to 44% for personal income, with a corporate tax rate of 25% and a value-added tax (VAT) rate of 7.5%, making it essential for expats and businesses to understand the tax system to navigate their obligations.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Greenland operates under a territorial taxation system, where only income derived from sources within Greenland is subject to taxation, as opposed to a worldwide taxation system where all income, regardless of source, is taxed. This distinction is crucial for individuals and businesses with international income streams. Residency rules for tax purposes in Greenland are based on physical presence, where an individual is considered a tax resident if they have been present in Greenland for more than 6 months in a calendar year.
The tax system in Greenland is closely tied to that of Denmark due to its status as a territory of Denmark. This relationship affects various aspects of taxation, including tax treaties and the application of tax laws. Understanding the nuances of Greenland's tax system, including its territorial taxation approach and residency rules, is key to navigating the tax environment effectively.
Personal Income Tax
| Income Bracket (DKK) | Tax Rate |
|---|---|
| 0 - 42,500 | 36% |
| 42,501 - 73,300 | 37% |
| 73,301 - 103,100 | 38% |
| 103,101 - 154,900 | 41% |
| 154,901 and above | 44% |
| Personal income tax in Greenland allows for various deductions and allowances, such as deductions for mortgage interest, charitable donations, and certain expenses related to education and healthcare. Tax filing is mandatory for all residents, with the tax year running from January to December. Returns must be filed by May of the following year, and late filing can result in penalties. |
Corporate & Business Tax
- The corporate tax rate in Greenland is 25%, applicable to all business income derived from sources within Greenland.
- Small businesses and startups may be eligible for incentives and subsidies, aimed at promoting economic growth and development within the territory.
- Greenland has free zones where businesses can operate with reduced or no tax liability, attracting foreign investment and promoting trade.
- Registration requirements for businesses include obtaining a tax identification number and registering with the local tax authorities, which is a prerequisite for conducting business in Greenland.
- Businesses are also required to maintain accurate financial records and file annual tax returns, ensuring compliance with Greenland's tax laws and regulations.
VAT / Sales Tax
- The standard VAT rate in Greenland is 7.5%, applied to most goods and services.
- Reduced rates apply to certain essential goods, such as food and children's clothing, to alleviate the tax burden on necessities.
- Exemptions are available for specific services, including healthcare and education, which are considered essential public services.
- Tourist refund schemes allow visitors to claim a refund on VAT paid on goods purchased during their stay in Greenland, encouraging tourism and consumer spending.
For Expats & Foreign Workers
- Tax residency rules for expats are based on physical presence, similar to those for Greenlandic residents, with implications for their tax obligations.
- Greenland has double taxation treaties with over 50 countries, including Denmark, to prevent taxing the same income in multiple jurisdictions and reduce the tax burden on international income.
- Expats are required to contribute to the social security system, which provides benefits for retirement, healthcare, and unemployment.
- Remittance rules allow expats to transfer their income abroad, subject to certain regulations and tax implications.
- Expats may also be eligible for special tax deductions and allowances, depending on their individual circumstances and the terms of their employment contract.
- Understanding the tax implications of working in Greenland is crucial for expats to plan their finances effectively and comply with local tax laws.
Crypto & Investment Income
- Investment income, including dividends and interest, is subject to personal income tax, with rates ranging from 36% to 44%.
- Cryptocurrency is considered an asset and is taxed as capital gains, which are included in the individual's income tax return.
- Dividend income from shares in Greenlandic companies is subject to a withholding tax, which can be credited against the individual's tax liability.
- Foreign investment income may be subject to tax in Greenland, depending on the source of the income and the individual's tax residency status, highlighting the importance of understanding the tax implications of international investments.