Corporate - Group taxation

Last reviewed - 08 June 2023

Joint taxation is not possible in Greenland.

Transfer pricing

Greenlandic transfer pricing rules apply to transactions between related parties (e.g. intra-group transactions). The rules apply when a company or person directly or indirectly owns more than 50% of the share capital or 50% of the voting rights in another company.

Companies are obligated to disclose in the annual tax return certain information regarding type and volume of intra-group transactions. There is currently no practice regarding requirements for transfer pricing documentation.

Thin capitalisation

Greenland limits interest deductions according to the thin capitalisation rule. This rule works to disallow gross interest costs and capital losses on related-party debt to the extent the overall debt-to-equity ratio exceeds 2:1. Related-party debt is defined so as to include external bank debt if group member companies or shareholders have provided guarantees to the bank. This rule does not apply if the controlled debt is less than 5 million Danish kroner (DKK).

Controlled foreign companies (CFCs)

According to the Greenlandic CFC rules, a Greenlandic company has to include in its taxable income the CFC income of a foreign subsidiary if all of the following criteria are met:

  • The Greenlandic company, alone or together with other group companies, individual owners, and/or their next of kin, controls the foreign company.
  • During the income year, the subsidiary’s financial assets, on average, make up more than 10% of the subsidiary’s total assets.
  • The foreign company is taxed ‘substantially lower’ than under Greenlandic taxation.

There is no black or white list that exempts subsidiaries resident in certain countries.

CFC income is defined in some detail and includes a broad spectrum of passive and financial income.