How to File Company Tax in Greenland

Filing company tax in Greenland may not be as widely discussed as in larger economies, but it is just as important—especially for businesses operating in sectors like fisheries, mining, logistics, and services.

Greenland has a self-governing tax system, separate from Denmark, and while the framework is relatively straightforward, it includes some unique rules that business owners must understand.

In this complete guide, you’ll learn exactly how to file company tax in Greenland, step by step, in a clear and human-friendly way.

1. Understanding the Corporate Tax System in Greenland

Corporate income tax in Greenland is administered by the national tax authority.

Greenland operates a self-assessment system, meaning:

• Companies calculate their own tax
• Authorities review submissions afterward

Key Principle

• Companies are taxed on profits, not revenue

2. Corporate Tax Rate in Greenland

Standard Corporate Tax Rate

• 25% for both local and foreign companies

If tax is underpaid and settled late:

• A 6% surcharge may apply, effectively increasing the burden

3. Who Needs to File Company Tax?

Resident Companies

• Taxed on worldwide income

Non-Resident Companies

• Taxed only on:
  • Income from Greenland
  • Permanent establishment activities

4. Determine Corporate Residency

A company is considered resident if:

• It is registered in Greenland
• Its management and control are in Greenland

5. Know Your Tax Year

The default tax year is:

1 January to 31 December

However, companies may apply for a different fiscal year.

6. Maintain Proper Accounting Records

Accurate bookkeeping is essential.

You Must Track

• Revenue
• Expenses
• Payroll
• Assets and liabilities

These records form the basis of your tax return.

7. Prepare Financial Statements

Before filing taxes, prepare:

• Profit and Loss Statement
• Balance Sheet
• Supporting notes

Tax returns must be based on audited accounts

8. Calculate Taxable Income

Formula:

Total Revenue – Allowable Expenses = Taxable Income

Taxable income is derived from accounting profit, adjusted for tax rules

9. Understand Taxable Income Components

Included

• Business income
• Rental income
• Royalty income
• Foreign income

Special Rule

• Worldwide income is taxable, except some foreign real estate income

10. Claim Allowable Deductions

Greenland allows deductions, but rules can be strict.

Common Deductions

• Operating expenses
• Salaries
• Pension contributions
• Depreciation

Unique Feature

• Dividends paid can be deductible in some cases

11. Depreciation Rules

Assets can be depreciated:

• Machinery → up to 30% declining balance
• Buildings → 5% straight-line
• Ships → 10% straight-line

12. Loss Carryforward

Companies can:

• Carry losses forward for up to 10 years

13. Complete the Corporate Tax Return

The corporate tax return includes:

• Company details
• Financial statements
• Tax calculations
• Disclosure of related-party transactions

14. Submit Your Tax Return

Deadlines

• 1 May (standard deadline)
• 15 June (if filed electronically)

15. Pay Your Corporate Tax

Payment Deadline

• 20 November of the following year

16. Understand Penalties

Late filing may result in:

• Daily fines (up to a maximum limit)

17. Special Industries (Mining & Oil)

Some industries have additional rules:

• Royalties may apply
• Special tax regimes exist

18. Transfer Pricing Rules

If your company deals with related entities:

• Transactions must be at arm’s length
• Documentation may be required

19. Thin Capitalization Rules

Interest deductions may be limited if:

• Debt exceeds allowed ratios (e.g., 4:1 rule)

20. Real-Life Example: Small Business

Profile

• Revenue: DKK 500,000
• Expenses: DKK 300,000

Taxable Income

• DKK 200,000

Tax Payable

• 25% = DKK 50,000

21. Real-Life Example: Growing Company

Profile

• Revenue: DKK 2,000,000
• Expenses: DKK 1,400,000

Outcome

• Pays tax on profits
• Applies depreciation

22. Real-Life Example: Resource Company

Profile

• Mining company

Outcome

• Pays corporate tax + royalties

23. Common Mistakes to Avoid

• Missing deadlines
• Incorrect deductions
• Poor documentation
• Ignoring foreign income

24. Prepare for Tax Audits

Audits in Greenland are relatively informal.

Authorities may:

• Request clarification
• Ask for documentation

25. Use Accounting Software

Helpful tools:

• ERP systems
• Cloud accounting tools

26. Hire a Tax Professional

Recommended if:

• You operate internationally
• You have complex finances
• You deal with related entities

27. Plan Ahead for Taxes

Good habits include:

• Budgeting for tax payments
• Monitoring profits
• Tracking expenses

28. Benefits of Filing Company Tax Properly

• Avoid penalties
• Maintain compliance
• Improve financial control
• Build business credibility

29. Final Thoughts

Learning how to file company tax in Greenland is essential for any business operating in the region.

While the system is relatively straightforward, it includes unique features such as:

• Self-assessment
• Strict deduction rules
• Industry-specific taxation

Focus on:

• Accurate recordkeeping
• Timely filing
• Strategic tax planning

With the right approach, tax filing becomes a manageable and valuable part of running your business.

FAQs

Q1: What is the corporate tax rate in Greenland?

The standard rate is 25%.

Q2: When is company tax due in Greenland?

Typically by 20 November of the following year.

Q3: Do all companies need to file a tax return?

Yes, all taxable companies must file annually.

Q4: What happens if taxes are not filed?

Daily penalties and possible additional charges apply.