Naalakkersuisut is moving to remove a proposed tax measure that Greenlandic business leaders warned could discourage foreign buyers and make local companies harder to sell.
The change appears in a formal amendment filed ahead of the bill’s second reading in Inatsisartut. Sermitsiaq reported the reversal on June 3.
The original proposal was intended to prevent profits earned in Greenland from being moved abroad without sufficient taxation. Under the planned rules, a company that moved its tax residence outside Greenland could face an additional tax based on its accumulated equity.
The government argued that the measure would close a gap in the tax system and help ensure that value built up in Greenland remained subject to Greenlandic taxation.
Concerns Over Foreign Buyers
The proposal raised a practical concern for Greenlandic business owners. A sale to a foreign investor would not automatically have triggered the tax. But a buyer from Denmark, the United States, Canada, or another country may want to appoint its own management team, integrate the company into a larger group, or move parts of its decision making structure outside Greenland.
If those changes caused the company’s tax residence to move abroad, the proposed rules could have triggered an additional tax of approximately 17–19% on accumulated equity.
The possibility of a large tax bill could discourage potential buyers from entering negotiations.
The concern is especially relevant in Greenland, where business owners may have a limited pool of local buyers when the time comes to sell. A business owner may spend decades building a successful company, employing local workers, and reinvesting profits. When the time comes to retire or sell, the strongest buyer may come from outside Greenland.
Rules that create uncertainty around a foreign acquisition could reduce the number of interested buyers and make business succession harder.
For many owners, selling the company is how the business continues after they retire. A successful sale can preserve jobs, customer relationships, and the value built up over many years. If potential buyers are discouraged by tax uncertainty, the owner may have fewer options and the company may be harder to pass on.
Proposal Removed From Current Bill
Naalakkersuisut has now proposed removing the expanded exit-tax provisions from the current legislation.
The official amendment says the issue can instead be considered as part of an upcoming business-tax reform and discussed with representatives of the business community.
The wider income-tax bill remains under consideration in Inatsisartut, so the amendment still needs to complete the legislative process.
Greenland has a legitimate interest in collecting taxes on profits generated within the country. But as the country seeks to attract international investment, its tax rules also need to leave room for business growth, succession planning, and the sale of Greenlandic companies to qualified foreign buyers.
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