Greenland

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.

A new regulation has been issued on 17 October 2023, stating that certain companies must submit transfer pricing documentation within 60 days after the tax return deadline.

Whether the company is obligated to prepare and submit transfer pricing documentation depends on whether the controlled transactions reported in specific fields on the S40 form with the tax return exceed the threshold based on a special ’median value‘ calculation. The threshold for 2023 is DKK 500 million (DKK 250 million for 2024).

The threshold will be gradually reduced, and from 2030 all entities with controlled transactions, regardless of size, must submit transfer pricing documentation every year.

The Greenlandic transfer pricing rules also apply to transactions between Greenlandic group entities (no joint taxation in Greenland). 

Thin capitalisation

Greenland limits interest deductions according to the thin capitalisation rule. Up to and including 2023, the 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. With effect from the 2024 income year, the existing thin capitalisation rule (interest limitation) will be changed to a 4:1 debt-to-equity.

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 DKK 5 million.

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.