An individual may be taxed in Greenland on the basis of full or limited tax liability.
An individual who is resident in Greenland is subject to full tax liability on one’s worldwide income unless the individual is considered a resident of another country according to a double residence clause in a relevant double taxation treaty (DTT).
An individual who is fully tax resident in Greenland will, as a main rule, be taxed at up to 44%, depending on the municipality of taxation. Some deductions are applicable.
An individual not fully tax liable may have limited tax liability to Greenland. Limited tax liability is restricted to income from Greenlandic sources, listed in the Greenlandic Tax Act Section 2, including:
- Salary for work performed in Greenland, unless the employment is exercised during stays not exceeding 14 consecutive days and the employee is employed by an employer who is neither resident nor has a permanent establishment (PE) in Greenland. An allowance (deduction) of the lesser of 10% of the income taxable to Greenland and DKK 1,000 is available.
- Certain other types of personal income, including income as an artiste or sportsman, director’s fees, pension distributions, economic education support from sources in Greenland, etc.
- Income arising from a business enterprise with a PE.
- Income from independent personal services performed either from a fixed base in Greenland or during a stay of 90 days or more.
- Income from shipping or air traffic within, or, in case of regular traffic, to or from Greenland.
- Income from real estate located in Greenland, including sale.
- Dividends from Greenlandic companies.
- Royalty income from Greenland.
An individual with limited tax liability to Greenland will, as a main rule, be taxed at up to 44% on income from sources in Greenland.
Personal income tax rates
Generally, individuals are subject to state taxes (national income tax) and municipal tax.
The tax percentages may be adjusted every year, and the 2020 percentages are as follows:
|Municipality||Municipality tax (%)||National tax (%)||Joint local municipality tax (%)||Total tax (%)|
|Outside municipal areas||26||10||N/A||36|
Special regime for oil, gas, and mineral activities and certain construction activities
Individuals working in Greenland in relation to oil, gas, and mineral activities or construction activities outside existing towns and settlements are taxed at a flat rate of 35% with no deductions allowed, provided that they have not been taxable to a local Greenlandic municipality for six months prior to the commencement of the activities.
Local income taxes
For municipal tax rates, please see Personal income tax rates above.