Factsheet for measure
DK-2020-11/600
–
Updated
– measures in Denmark
Compensation for corporate fixed expenses
Midlertidig kompensation for virksomheders faste udgifter
Background information
Together with all parties of the Danish parliament, the government has passed a new scheme that allows vulnerable companies, (that experienced a marked decline in their turnover as as a result of both the COVID-19 pandemic and the measures taken to limit the spread in Denmark) to receive support for their fixed cost e.g. expenses for contracts that can't be cancelled to continue operations in the extraordinary situation.
The scheme was first introduced with the political agreement on 1 April 2020 targeting companies from 9 March through 8 June 2020. However, the scheme was partly reopened two times in December 2020, first with a new political agreement on 9 December 2020 due the introduction of new restrictions in 38 municipalities, and secondly due the introduction of the restrictions in a total of 69 municipalities. Finally, on 15 December, it was decided to roll out the compensation scheme to the rest of Denmark, in total 98 municipalities.
The legal referance is "BEK nr 332 af 01/04/2020".
Content of measure
Companies can be reimbursed for documentable fixed expenses, including for example rent, interest expenses and contract-related expenses during a period (e.g. leasing), where the companies are exposed to a large decline in revenue.
The compensation scheme is based on the following five principles:
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Businesses across all industries should be able to receive compensation.
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The compensation is targeted at companies with a large drop in turnover domestically (more than 40%).
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The compensation is targeted at fixed expenses and amounts to between 25 and 80%.
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Compensation covers up to three months and is paid as soon as possible.
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If revenue has decreased considerably less, then the compensation must be repaid.
Operators who are required to be fully closed by order will during this period be compensated, corresponding to 100% of the fixed expenses.
With the first political agreement on April 2020, companies could apply for compensation of expected revenue decline during the period from March 9 to June 9 as a result of COVID-19.
But with the new political agreement on December 2020, companies can again apply for compensation for expected revenue decline in the period from 9 December 2020 through 3 January 2021.
Updates
The following updates to this measure have been made after it came into effect.
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01 December 2021
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The flat-rate compensation scheme will be extended until 28 February 2022 and the requirement for a reduction in turnover will be reduced to at least 30%. This will apply from the 1 December 2021 until 28 February 2022.
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09 February 2021
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The parties agree on a number of improvements to the compensation schemes for fixed costs. These are the following improvements:
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Changed deadline for compensation for binding agreements on marketing, etc. The deadline for when binding agreements on marketing is changed from 9 March 2020 to 9 December 2020.
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Extension of compensation options for suppliers to public events.
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Relaxation of access requirements for companies affected by the Ministry of Foreign Affairs' travel guidance.
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Use of measure
The Danish Business Authority (Erhvervsstyrelsen) regularly updates a webpage with information on the numbers of the different compensation schemes. As of 12 October 2021 the numbers from the compensation scheme for fixed expenses are:
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Approved applications: 67,021.
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Number of companies: 33,619.
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Total amount: DKK 15,782,000 (approx. €2,122,000).
As of December 2021 the numbers are:
* Approved applications: 75,974.
* Number of companies: 37,168.
* Total amount (disbursed): DKK 18,802,651,803 (approx. €2,527,076,402).
Target groups
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Workers
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Businesses
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Citizens
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Self-employed
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Applies to all businesses
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Does not apply to citizens
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Actors and funding
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Actors
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Funding
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National government
Employers' organisations
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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No involvement
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Consulted
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Form
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Not applicable
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Direct consultation outside a formal body
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Social partners' role in the
implementation, monitoring and assessment phase:
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No involvement
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Main level of involvement: Unknown
Involvement
The compensation scheme was not adopted in a tripartite negotiation between the employer organisations, labour organisations and the Government. Instead, it was adopted by the Government and a large majority of the parties in the Parliament. However, the business and industry organisation were involved in the preparation of the scheme in the form of consultation processes. These consultation processes are not public.
Views and reactions
Unknown.
Sources
