Naalakkersuisut introduced a gross tax system, effective from January 1, 2011, for individuals working in the resource sector and on major construction projects outside established towns and settlements in Greenland. Under this system, employees are taxed at a flat rate of 35% on their gross income, with no deductions allowed. The gross tax is calculated on income earned during employment, including any fringe benefits such as free meals, lodging, and phone usage. However, employer-managed contributions to pension schemes in Greenlandic and Danish pension companies are exempt from this taxable income.

This taxation system was designed to simplify tax administration for workers involved in remote and large-scale resource and infrastructure projects, ensuring a fixed tax rate without the complexity of deductions.

Key Aspects of the Bruttoskat System:

• 35% Flat Tax: Employees working on projects in remote areas are taxed at a rate of 35% on their total gross income, with no deductions for work-related expenses.
• Fringe Benefits Included: The gross tax also applies to non-cash benefits like free food, lodging, and communication services provided by the employer.
• Exemption for Pension Contributions: Employer-managed pension contributions to Greenlandic or Danish pension schemes are not included in the taxable income under the gross tax system.

Eligibility:

The system applies to individuals who:

• Have not been taxable in any Greenlandic municipality for the past six months.
• Work on projects related to planning, construction, installation, or assembly outside established towns and settlements, as well as preliminary investigations, exploration, or exploitation of mineral resources.

Exceptions:

The gross tax system does not apply to:

• Employees working on the exploitation of ice and water for export.
• Employees who also receive A-income that is not covered by this taxation scheme.