Change in corporate tax rate and on account tax
The corporate tax rate is 25% for both Greenlandic and foreign companies from 1 January 2020. Previous, a ‘surcharge’ of 6% of the corporate tax payable was applicable hence the effective corporate tax rate was 26.5%. From 1 January 2022, a company is able to pay on account tax to the Greenlandic Authorities. This on account tax has to be paid before the end of the year for the present tax year. If the actual corporate tax exceeds the prepaid on account tax, there is a ‘surcharge’ of 6% of the corporate tax payable; consequently, the effective corporate tax rate is 26.5%. The tax with surcharge is due for payment on 1 November with final due date for payment 20 November. Oil and mineral licence holders are exempt from the 6% surcharge according to current practice.
The Greenlandic Parliament has implemented the Danish Companies Act with effect from 1 January 2018. The implementation of the Danish Companies Act has implied that the Greenlandic Business Register (GER) has been dissolved and that all companies registered in GER are automatically transferred to the Danish Business Register (CVR). It is intended that Greenlandic entities will receive a CVR no. identical to its previous GER no. In the event that a Greenlandic entity's GER no. already exists as a Danish entity's CVR no., the Greenlandic entity will be granted a new CVR no. Further, the implementation of the Danish Companies Act provides new possibilities of establishing a company in Greenland through the digital platform Virk.dk and digital solutions regarding changes to existing companies. Therefore, any registrations and changes to existing Greenlandic entities must from now on be performed via Virk.dk.