Background

• Companies are experienced loss of revenue due to the restrictions put in place by the Danish government
• On 18 March 2020, the government presented a new package to help reimburse fixed costs that companies have during the COVID-19 period
• The proposal needs to be negotiated and agreed upon with the other parties in the Folketing (parliament) - details to be confirmed but it will likely pass

Details

• The compensation will be purely for fixed expenses, and will cover 25-80% of those
• Up to 3 months will be covered, and paid out as soon as the application is approved
• If the revenue levels don't drop enough (i.e. below 40%), the compensation has to be repaid
• Fixed expenses include rent, interest and contract based expenses (e.g. leasing)
• The costs are compensated as follows:
  • 80% if the revenue decline has been 80-100%
  • 50% if the revenue decline has been 60-80%
  • 25% if the revenue decline has been 40-60%
  • 100% compensation if a company is forced to close its operations
• The companies need to send in an audited statement of expected revenue decline in the period 9 March to 9 June 2020 as a result of COVID-19
• The Danish Business Authority will then pay out the compensation
• Spot checks are performed throughout the period
• At the end of the period, the revenue will be confirmed based on VAT reports and subsequently adjusted if the revenue did not amount to what was expected (either lower or higher) > companies may have to pay back compensation if claims are untrue
• Each case will be processed manually by the authorities
• As reports used for submission and application for the schemes need to be audited, 80% of the incurred auditor's cost can be compensated
• The compensation is capped at DKK 60m per business for this specific period
• Guidance on how the decrease in turnover should be calculated, how the decrease should be documented and which costs can be covered by this scheme hasn't been provided yet. It's likely that the companies will need to get an auditor to create a report which can be sent with the application, but this is also expected to be clarified in the guidance