Despite other countries in Europe, Denmark was the second country in the continent to announce a lockdown to limit the spread of coronavirus. Besides, it has stablished the following measures to alleviate the economic crisis:
Compensation
Salaries
Government compensation of up to 75 % of salaries but maximum DKK 30,000 per employee per month for employers facing dismissal of minimum 30 % of their staff or minimum 50 employees due to the Covid-19 crisis.
Business overheads
Government compensation of 25-80 % of business overheads. However, if the business has been shut down due to a government ban (e.g. restaurants, bars, hairdressers etc.) it is entitled to 100 % compensation for the shutdown period. The overheads must exceed 12,500 per month with a maximum of DKK 110,000,000 in compensation per business.
Events
Government compensation for losses due to cancellation, postponement or other changes to public events with at least 350 participants. Only covers expenses and not loss of revenue and only for expenses not already covered by one of the other compensation schemes.
Owners and freelancers
Government compensation for owners / freelancers for reduced revenue of 30 % or more due to Covid-19. Compensation of 75 % of the loss but this is expected to be increased to 90 % (100 % if the business has been shut down completely due to government ban). Requires at least 25 % ownership, that the owner is primarily employed in the business and a maximum of 10 employees, but this is expected to be increased to a maximum 25 employees.
Reimbursement of sickness benefits
Employers can get reimbursement of sickness benefits from the first sick day of the employee if it is caused by a Covid-19 related health issue.
Taxes
Deferment of deadlines to pay withholding income tax (A-tax), labor market contribution, B-tax and VAT. The new deadlines depend on the size of the business. Further, the balance limit of the tax account can be temporarily increased to DKK 10,000,000.
Funding
State guarantee to loans and export credit
Access for lenders to state guarantee of 70 % on new loans issued to businesses distressed by the Covid-19 crisis. Only applies for loans to businesses that were not distressed before the Covid-19 crisis and the guarantee cannot exceed the loss in revenue caused by the Covid-19 crisis. Different conditions apply dependent on the size of the business ·Access for lenders to a state guarantee on part of the risk of export credits issued in 2020. Further, insurance providers have an extended access to get reinsurance of the risk on export insurances.
Return VAT
Small and medium sized businesses can get some of the VAT paid in 2019 returned as an interest free loan.
No penalties for the postponements and extensions.
Henrik Sjørslev is memeber of the European Insolvency Practitioners Association
