The tax year is from 1 January to 31 December.
Provisional taxes are withheld or collected on the basis of an estimated income for the current year. Accordingly, a preliminary tax return must be filed with the Greenlandic tax authorities.
All individuals who are either subject to full or limited tax liability to Greenland are basically obligated to submit a tax return, including all necessary additional information regarding income, to the Greenlandic tax authorities by 1 May in the year following the relevant income year. However, foreigners who are taxable to Greenland under the special expat regime are exempt from lodging Greenlandic tax returns. The same applies to individuals with limited tax liability in the form of withholding tax (WHT) on royalties.
A tax surcharge of DKK 200 per day (maximum DKK 2,000) is levied for late submission of the tax return.
When the final tax return has been reported, the Greenlandic tax authorities elaborate a final tax assessment that states whether the individual has an underpayment of tax, excess tax, or neither of the two.
Individuals leaving Greenland have to file a tax return at the normal deadline.
Payment of tax
Taxes on wages (including wages in labour hire-out situations) and dividends (and royalties for individuals with limited tax liability on royalties) are withheld at source on the basis of the preliminary tax return.
When the final tax has been assessed during the year following the income year in question, an underpayment of tax or an excess tax may occur. Underpayment of tax is payable in three instalments with due dates on 20 September, 20 October, and 20 November in the year of the assessment and will include a surcharge of 8%.
Overpayment of tax is due to be returned before 1 September including a surcharge of 2%.
Tax audit process
Tax audits are a rather formless affair. A letter of intent to change the tax assessment, including a fact presentation, must be sent to the tax payer by the Tax Agency.
Statute of limitations
The tax authorities must send out the abovementioned letter of intent no later than 31 October in the fifth income year after the year under scrutiny. The same time bar applies to the taxpayer seeking to amend a prior year’s tax return.
In case the Tax Agency or the taxpayer, for reasons unattributable to it and for which it is not responsible, did not know of information of either factual or legal nature that justify a change of the tax return, a tax return may be reopened even outside the stated time bar. Renewed assessment or application for reopening, as the case may be, must be processed no later than six months after the information justifying the change came to the attention of the Tax Agency or taxpayer.
Topics of focus for tax authorities
There are no relevant specific topics in focus for the Greenlandic tax authorities.