Continued Opposition to Emigrant Taxation in Greenland
Large segments of Greenland’s business community are voicing strong disapproval of the Naalakkersuisut’s contentious bill on emigrant taxation. This widespread sentiment is reflected in a collective consultation response submitted by 14 companies and organizations, alongside insights from the Bank of Greenland regarding a recent amendment proposed by the Department of Finance and Taxation.
On January 16, the department, led by Minister of Finance and Taxes Mute B. Egede of Inuit Ataqatigiit, put forward an amendment for consultation following a series of unfavorable responses from businesses and multiple reports in Sermitsiaq. The deadline to submit opinions on this latest proposal was January 19.
A Grim Outlook for Business Owners
Among those weighing in on the matter is Kitdlak Knudsen, the proprietor of Carl Lynge ApS, an electrical company in Nuuk. Previously expressing his concern in Sermitsiaq, Knudsen explained that the proposed exit taxation could potentially force him to shutter his business, as there are no buyers within Greenland. However, he does have a prospective buyer in Denmark.
Unfortunately, after reviewing the amendment proposal, Knudsen remains skeptical. The provisions allow for an exception if management changes hands upon sale, but Knudsen does not qualify for this exemption.
“I have a buyer who wants me to stay on as director. The amendments don’t help me; either my buyer starts firing me now, or I’ll be hit with exit taxation when I eventually retire,” he remarked to Sermitsiaq. “Thus, my buyer is not interested in proceeding with the transaction,” he added.
Taxation Concerns from Accounting Experts
Backing Knudsen’s apprehensions is his accountant, Per Laugesen from Greenland’s Audit. He underscores a fundamental issue: under the proposed changes, individuals could still face taxation on their entire equity, even if no cash has been drawn for personal use.
“It’s clearly unreasonable and could lead to the closure of otherwise viable Greenlandic businesses,” Laugesen told Sermitsiaq.
The new proposal introduces certain exceptions, which include scenarios related to illness or studies, but leaves much to the discretion of the authorities. This lack of clarity raises alarms for businesses. “They cannot predict whether a decision will trigger a significant tax bill, which could endanger their very existence,” Laugesen warned.
Bank of Greenland’s Perspective
The Bank of Greenland, in its consultation response, argues that the recent amendments merely create exceptions from the original legislation, which primarily addresses illness and foreign investments with management changes. Most Greenlandic businesses are run by healthy individuals, so the bank fears that these changes will inhibit investments amid generational transitions.
“Many owner-managers pay themselves modest salaries to reinvest profits back into their companies for equipment, expansions, or hiring,” the bank explains. “Facing potential additional taxation and a rigid approach to retirement, they may feel compelled to increase their salary or dividend payouts instead, halting further investments in Greenland.”
A Coalition Agreement at Risk
The sentiment shared in the collective consultation underscores that even with its recent amendments, the bill runs contrary to aspirations outlined in the coalition agreement among Greenland’s four governing parties. According to the submission, there has already been a noticeable decline in interest to establish businesses in Greenland. Citing the Norwegian Police Intelligence Service, the document notes that more entrepreneurs are opting to set up as branches or permanent establishments rather than as local entities.
This amendment, they argue, not only contradicts but undermines the coalition’s stated goals of strengthening the business landscape, simplifying regulations, and enhancing Greenland’s attractiveness to investors.
“The economic policy must be sustainable and growth-oriented, focusing on long-term stability and necessary reforms” that foster a thriving private sector, the coalition agreement stresses. Signed in March 2025 by key political leaders, it emphasizes the urgent need for targeted tax reforms that facilitate rather than hinder business ventures.
As discussions unfold, the path ahead remains uncertain, but the voices from Greenland’s business community are loud and clear— change is essential.