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Government and institution measures in response to COVID-19.

Government and institution measures in response to COVID-19.

Return to homepage  |  Last updated: 24 June, 2020

Tax measures – Direct and Indirect

(e.g. payment deferrals, rate reductions…)

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Employment-related measures

(e.g. state compensation schemes, training…)

Sick leave benefits subsidy Ministry of Finance, 12 March 2020

  • Sick leave benefits are normally provided by the employer in the first month of illness, however now, if related to COVID-19, the government will cover these. It is intended for all companies which illness has to be related to COVID-19.

Salary compensation, 15 March 2020, 30 March 2020 and 5 June 2020

  • The government will subsidize 75% of the salary costs for employees that otherwise would have been fired as a result of the company’s financial losses caused by COVID-19. The subsidy has a fixed cap of DKK30,000 per employee on a monthly basis. The subsidy scheme runs until 29 August 2020.
  • Requirements:
    • A company is eligible if it otherwise would have fired a minimum of 30 % of its employees
    • The employee is not allowed to work while salary is being subsidized
    • The employee has to spend five days of holiday before the start of the subsidy

Self-employed compensation 19 March 2020, 18 April 2020 and 15 June 2020

  • The government will compensate self-employed for 90% of lost revenue resulting from COVID-19. The subsidy has a fixed cap per month. It is directed to self-employed with:
    • Expected revenue decline by more than 30 % as a result of COVID-19;
    • Less than 10 employees;
    • Average revenue above DKK15,000 per month in a prior period;
    • Owner’s personal income to be less than DKK0.8 million in 2020.
  • With an amount of up to DKK23,000 per owner in which each owner owns a minimum of 25%, it is limited to the period from 9 March to 8 August and the subsidy cannot be combined with other COVID-19 subsidies (such as cost coverage).

Start-ups:

  • Compensation of salary up to 75 % (not more than DKK 23,000 per month per employee)
  • Emergency measures in relation to paid holidays
  • Extended right to a refund for employees’ sick leave from day one (instead of after 30 days), if the given employee is on sick leave due to Covid-19.

Economic stimulus measures

(e.g. loans, moratorium on debt repayments…)

Entertainment event support by Ministry of Finance, 10 March 2020

  • Cash subsidy to compensate for direct and indirect costs relating to the cancellation or postponement of larger entertainment events (e.g. concerts, sports, etc.). The subsidy serves to cover costs only and should not result in a profit for Event organizing companies

Reduced loan restrictions by Ministry of industry, business and financial affairs, 12 March 2020

  • Since the financial crisis, banks and mortgage institutions have been required to reserve 1 % of its total funds as a buffer against a new financial crisis.
  • This restriction now no longer applies, which is expected to improve the financing environment for companies.

Loan guarantees by Ministry of Finance, 12 March 2020

  • The government provides a loan guarantee on 70% of new corporate loans that are issued to cover losses directly relating to COVID-19. The loan amounts up to DKK 1 billion in losses (total in Denmark) intended for all companies that are:
    • Small and medium size companies: Operating losses of 50% or more.
    • Large companies: Revenue losses of 30 % or more.

SAS guarantees, 17 March 2020

  • The Danish and Swedish government offers new larger guarantees to SAS, amounts up to DKK2 billion.

Cost compensation, 19 March 2020 and 18 April 2020

  • The government will subsidize 25 to 80% of a company’s fixed costs if the company’s revenue is expected to decline significantly as a result of COVID-19.
  • The share of fixed costs that are subsidized depends on the expected revenue decline:
    • 80% if revenue decline of 80-100%;
    • 60–80% if revenue decline of 60-80%;
    • 25% if revenue of 35-60%.
  • In addition, companies that have been commanded to shut down will get all of its fixed costs subsidized.
  • The cost compensation is limited to the period from 9 March to 8 July. Maximum compensation in the period per company: DKK60 million. If actual revenue decline turns out to be less, the subsidy should be refunded. The company requirements are: 
    • Expected revenue decline by more than 40% as a result of COVID-19;
    • Minimum monthly fixed costs of DKK12,500;
    • Documentation on the expected revenue decline has to be signed by an auditor. This cost will be partly refunded by the government in case the application is successful.

Export credit Guarantee, 19 March 2020

  • The government has increased its guarantee with the public export credit agency (“EKF”) to allow for additional loans to Danish companies within exports that are struggling with liquidity due to the impact of the COVID-19.

Travel guarantee fund Guarantee, 19 March 2020

  • The Danish Travel Guarantee fund (“Rejsegarantifonden”) offers financial support to end customers if a travel agency goes into bankruptcy. The government has increased its guarantee with the fund by DKK1.5 billion.
  • In addition, the objective of the fund has been changed to also potentially provide financial support to travel agencies for cancelled travel arrangements.

Public investments by Ministry of Finance, 26 March 2020 and 29 May 2020

  • The Danish municipalities and regions have been encouraged to move forward investments for renovation of buildings, roads, etc. with the removal of an existing cap on these in 2020. Furthermore, the budget for these type of investments has been increased.
  • In addition, municipalities have the option to postpone corporate tax due dates. Furthermore, municipalities are allowed to prepay invoices of up to DKK1 million

Public investment fund by Ministry of Finance, 11 June 2020

  • The government has established an investment fund with funds of DKK10 billion for equity investments in larger Danish companies in need.
  • The fund should only invest in companies that are otherwise unable to obtain financing due to the corona crisis.
  • The investment criteria include:
    • Revenue above DKK500 million
    • Key industry from a national perspective
    • Profitable prior to the corona crisis
    • High share of exports.

Start-ups

  • Reduced loan restrictions
  • Loan guarantees by Ministry of Finance: The government provides a loan guarantee on 70 % of new corporate loans that are issued to cover losses directly relating to COVID-19.

Customs Measures

No national measures

  • At the present point in time the Danish Customs Authorities have not taken any measures in regard to the applicable Customs regulations in Demark.

Export

  • the EU has introduced export restrictions for certain personal protective equipment. It is possible to apply for an export license for export of protective equipment at the Danish Business Authority's website. (6 weeks effective)

Other measures and sources

Main sources of information:

Contact us

Tax: Ole Schmidt – ole.schmidt@kpmg.com
Restructuring: Dale Treloggen – dale.treloggen@kpmg.com
Legal: Stine Andersen - stine.andersen@kpmg-law.com