The government has made an agreement that contains an initiative to compensate overhead expenses for businesses anticipating a substantial decline in turnover in the period 9 March to 9 June 2020.

The scheme is relevant for businesses which in the period 9 March to 9 June 2020 have:

  • a loss of turnover of at least 40 % and
  • overhead expenses of at least DKK 25,000.

The table below shows the share of the overhead expenses that can be compensated. Only provable overhead expenses can be compensated, including rent, interest expenses and contractual expenses such as leasing.

According to the initiative, a business can have 100 % of the overhead expenses compensated if it has been ordered to shut down completely.

If the turnover appears to have declined significantly less, the compensation must be repaid. It should be noted that a business may receive maximum DKK 60 million as compensation in the period in question.

For the time being, the information about the initiative is sparse, and more information will follow when a bill on the aid scheme is presented.

CAN THE BUSINESS RECEIVE COMPENSATION?

If the business can answer YES to the following questions, it may apply for compensation under the scheme:

  • Does the business have overhead expenses of at least DKK 25,000 in the period 9 March to 9 June 2020 that are provable?
  • Is the business affected by a loss of turnover of at least 40 % in the period 9 March to 9 June 2020?
  • Is the loss of turnover of at least 40 % related to COVID-19?

HOW TO APPLY

It is not yet possible to submit applications for compensation (updated). The Danish Business Authority has stated that a digital application must be submitted.

In its initiative, the government announces that businesses are to submit information certified by an auditor which confirms that the business is entitled to compensation. The business must solemnly declare that its turnover has declined.

The expense for auditor certification may be subsidised by up to 80 % according to the government’s agreement.

Horten recommends that the businesses provide documentation that the loss of turnover is due to COVID-19 to the extent possible as the businesses may later have to defend this.

For businesses with prospects of receiving aid, it is relevant to consider whether a loss of turnover may be due to other matters than COVID-19, as well as it is relevant to ensure that the loss of turnover is calculated correctly. Horten may assist with statements and calculations that may provide businesses with transparency with regard to the prospects of aid and the risk of claims for repayment.

For more information on the government’s initiative:
Regeringen og partier enige om hjælpepakke (article in Danish)

contacts

Poul Hvilsted

Partner

Jonas Enkegaard

Partner

Jakob Krag Nielsen

Partner