May 2020

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The purpose of this blog is to provide a source of business, tax, and accounting information. English is chosen language to ensure coverage for Danish and non-Danish readers. 

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Corona relief: Get your compensations

May, 2020.

You have been working hard to survive. You have been working days and nights to keep your business going and your customers happy. Now you should reach out for the government’s helping hand - to get your compensations.

Presently, the period which you can apply for compensations due to the coronavirus pandemic is three months: from the 9th March to the 8th June 2020. Compensation for staff cost is extended exceptionally with one month. Before asking for a piece of the cake, you should know the conditions.

Compensation for business owners and freelancers
The compensation period for business owners and freelancers is from the 9th March to the 8th June 2020. People in this category are likely to have a VAT registered company or B-income if you are working partly as a freelancer.

The conditions are:

  • Your sales/income  on average at least  DKK 10.000 per month before the coronavirus pandemic struck
  • You have a maximum 10 full-time employees (excluding the owner and the spouse)
  • You are expecting a loss of at least 30% due to the virus
  • You own at least 25% of the business

The last condition is having a personal income of under DKK 800.000 in 2020, which is tricky because you don’t know with certainty whether your income will be over this amount or not this year. My advice is to apply first, then return the money after.

Compensation for fixed expenses

The compensation period for fixed expenses is from the 9th March to the 8th June 2020. If you are forced to close partly your business during this period, then you can receive a compensation of up to 80% of your fixed expenses for rent, electricity, heating, etc. However, if you are unfortunately operating in the branches that are forced to close completely during the crisis, then you will get compensated 100% of your fixed expenses. Cheers!

The conditions are:

  • The business is registered with a CVR. number
  • The business was established latest in the 9th March 2020
  • Fixed expenses are at least DKK 25.000 in the compensation period. The fixed expense report must be signed by an independent certified public accountant (CPA).
  • The business is expecting a loss of at least 40% due to the lockdown  
  • The business has been forced to close completely or partly

Condition number three is the reason for an extension of tax return filing deadline this year. Public accountants are so busy that it would be impossible to finish all the works on time. Some have jumped enthusiastically at the opportunity by increasing the prices for their service, which caused a public outcry for “the CPAs should show social responsibility in the corona crisis”.

Compensation for staff cost

Instead of three months, the compensation period for staff cost is four months from 9th March to 8th July 2020. Despite the good intentions, many businesses chose to fire their staff instead of receiving compensation. The reason lies in the long-term consequences of the corona crisis on the economy. If you stop the bleeding now, then you can save your business for a better time. If you don’t, then your business will sink like Titanic.

The conditions are:

  • The business was forced to reduce at least 30% of the labour force
  • The business has more than 50 employees
  • The business did not send staff home without pay
  •  The business did not receive another corona relief package
  • The staffs are not temporary dismissed
  • The business did not receive state support up to more than 50% of operating costs

The information in this article will be updated regularly when there are changes in the government policy for coronavirus-related compensations. Stay tuned with us.

For more information about the compensation scheme you can call the hotline service at the Danish Business Authority, telephone number 72 20 00 34. The hotline is open on Monday - Thursday from 8.30 -16.00, Friday from 9.00 – 15.00

Or you can read the information in English on their website