Why Employer Control

To ensure that employers fulfill their obligations under the Act on Income Tax, employees of the Tax Agency may carry out employer control, as outlined in Chapter 14 of the Tax Administration Act.

This may involve a visit to the employer’s business address. Accounting materials with supporting documents may also be required to be submitted to the Tax Agency. During employer control, all accounting materials may be inspected. Tax cards and other relevant documents may be requested for inspection.

The accounting control, in addition to reviewing payroll records with related documentation, may also include other accounting materials of the employer. Access to inspections, presentation of documents, and submission of accounting materials with supporting documents can be enforced through daily fines. Information for the control may also be collected from employees.

From the Control Office, new business owners/employers are also guided on what to pay attention to regarding tax legislation.

Employer's Responsibility and Liability

The person responsible for withholding, and possibly the authorized representative, is liable for the payment of A-tax (income tax withheld at source), as per Section 93 of the Income Tax Act.

If multiple businesses are registered together (as partnerships or similar), they are jointly liable for the payment. The person liable for the payment is also responsible for ensuring that the tax return is correctly filled out and submitted on time.

According to the Act on Income Tax, if a person fails to fulfill their duty to withhold A-tax or withholds too little, they are liable for the payment of the missing amount, unless they can prove that no negligence occurred.

If the claim against the employer cannot be accurately determined due to a lack of reporting or inadequate bookkeeping, the employer register may make a provisional assessment of the A-tax, as per Section 93, subsection 3 of the Income Tax Act.

Why Penal Liability (Tax Fine)

According to the Act on Income Tax, an employer can be fined or subject to other measures if they intentionally or through gross negligence:

• Fail to withhold A-tax or withhold too little,
• Fail to pay the withheld A-taxes on time,
• Fail to submit the report on time,
• Provide incorrect information on the report.

This is according to Sections 102 and 105 of the Income Tax Act. The tax fine is 1.5% monthly on unpaid A-tax and AMA (employee insurance contributions). In the case of subsequent employer control, if timely payment is still not made, the employer will be fined 2%.

Fringe Benefits

Each tax year, the Naalakkersuisut (Government of Greenland) announces the valuation of taxable fringe benefits. These fringe benefits include:

• Free accommodation
• Free meals
• Free meals (social institutions, etc.)
• Free meals, accommodation, and free travel (mining sector and outside municipal areas, etc.)
• Free residence
• Use of own goods
• Free travel
• Value of free motor vehicle use, outside Greenland
• Free telephone
• Valuation of livestock for sheep and reindeer farmers
• Free internet
• Free car.