Many businesses are facing challenging times due to the COVID-19 pandemic. In response to this, the Danish Government came up with different compensation packages to assist businesses in continuing their operations.

In this article, you’ll find information on how to apply through the Danish government to get funds for your business during COVID-19.

Businesses in Denmark can apply to the following 7 financial aid options:

#1: Compensation as Self-Employed with CVR Number

#2: Compensation as a Freelancer with B Income

#3: Compensation as a Freelancer with both A and B Income

#4: Salary Compensation

#5: Cancelled or Postponed Events

#6: Fixed Expenses Compensation

#7: Reimbursement of Sickness Benefit

This article will show you the requirements and the links to the various application portals you can use to apply for business aid due to COVID-19 in Denmark.

#1: Compensation as Self-Employed with CVR Number

Does your business have 25 or less full-time employees?

Then your business could receive temporary compensation for lost revenue due to COVID-19 in Denmark!

The compensation will amount to 90% of your businesses average monthly loss in revenue excluding VAT.

If your company has been forced to close, the compensation may amount to 100% for the period you’ve had to keep your business closed if it’s had no revenue during that period. 

You can apply for lost revenue compensation for either three or four months from March 9 through 8 June 2020 or through 8 July 2020 (On 15 June 2020, the Danish Government has agreed to extend the scheme by one month until 8 August 2020). 

The compensation to the business owner can be a maximum of DKK 23,000 per year; and a total of DKK 69,000 for a period of three months or DKK 92,000 for a period of four months. 

However, your business will not receive financial compensation if you have a personal income of more than DKK 800,000 in 2020. 

The application deadline for the compensation scheme is 31 August 2020.

Who can apply?

• Businesses with an average turnover of at least DKK 10,000 per month prior to COVID-19
• Businesses experiencing or expecting to experience, a decline in revenue of at least 30%
• Businesses with a maximum of 25 employees – The business owner and the accompanying spouse are not included in the 25 full-time employees requirement

Apply for compensation as self-employed with CVR number

Application for extension and update of an already approved application

On April 18, 2020, the Government and the parties to the Parliament agreed to improve the scheme for self-employed persons!

The changes will apply retroactively from 9 March 2020. 

For these new rules to cover your business, you will have to reapply, and you’ll be able to get:

• A compensation rate of up to 90%, or 100% if your business has been closed due to government intervention (injunction)
• An extension up to and including 8 July 2020

If you have an approved application, you may apply for an extension or adjustment.

Re-apply for compensation

#2: Compensation as a Freelancer with B Income

If you’re a freelancer with B income, you may receive temporary compensation for lost earnings due to COVID-19. 

This compensation will amount to 90% of your average monthly loss in B income, and if your business has been closed by notice, then the compensation may amount to 100% for the period you’ve not been able to work if you’ve not earned any income during this period.

This compensation may not exceed DKK 23,000 per year, a total of DKK 69,000 for a period of three months or DKK 92,000 for a period of four months.

You will not receive financial compensation if you’ve had a personal income of more than DKK 800,000 in 2020.

The application deadline for the compensation scheme is 31 August 2020.

Who can apply?

• Freelancers with a B income average turnover of at least DKK 10,000 per month prior to COVID-19
• Freelancers with a B income who have experienced, or expect to experience, a decline in revenue of at least 30%

Apply for compensation as a freelancer with B income

#3: Compensation as a Freelancer with both A and B Income

If you’re a freelancer with both A and B income, you may receive temporary compensation for income lost due to COVID-19. 

You can apply for lost income compensation for either 3 or 4 months from 9 March through 8 June 2020 or through 8 July 2020.

The application deadline for the compensation scheme is 31 August 2020.

Who can apply?

• Freelancers with permanent workplaces in Denmark, having an expected total loss in A and B income, and so-called other income, of at least 30% as a result of COVID-19
• Freelancers who have had A and B income of DKK 10,000 on average per month in 2019 or the past year with at least DKK 5,000 per month from B income and a maximum of DKK 20,000 per month from A income. (You have the option of including any taxable profits from self-employment in the DKK 10,000 per month average)
• As a freelancer you have had a maximum employment rate of 55% the previous year, corresponding to 20.35 hours per week
• The total income for the 2020 financial year must not exceed DKK 800,000
• You may not be eligible for unemployment benefits if you’ve received supplementary unemployment benefits or government benefits

Apply for compensation as a freelancer with both A and B income

#4: Salary Compensation

Businesses may be temporarily compensated for salary expenses of employees who have been retrenched due to COVID-19. You must only seek compensation for your employees if they were retrenched between 9 March 2020 through 29 August 2020.

The application deadline for the compensation scheme is 20 September 2020.

Who can apply?

• Businesses with a  minimum of 30% of staff or more than 50 employees retrenched. Whether the employee works part-time, full-time or is a student/intern, this does not affect the calculation of the 30% or the 50 employees count. 
• The requirement for a minimum of 30% of the staff or more than 50 employees is calculated as an average over the entire period for which you are seeking salary compensation for your business.

You can get the following in compensation:

• For salaried employees: The salary compensation amounts to 75% of the total salary expenses for the affected employees, however, a maximum of DKK 30,000 per employee per month.
• For non-salaried employees: The salary compensation is 90%, however, a maximum of DKK 30,000 per employee per month.
• The employee does not have to be a full-time employee to receive compensation. If your employee works less than full time (37 hours), the limit will be lowered proportionately. The limit for a part-time employee of 20 hours will thus be approximately DKK 16,000.

You cannot apply for compensation if:

• Your business takes advantage of the remuneration options without pay 
• Your businesses cost of wages is covered in other ways and from other support schemes introduced as a result of COVID-19
• Your employees are not fired
• You’re an institution or similar, where public subsidy for operating amounts to half or more of expenses and is expected to continuously cover half or more of the institution’s ordinary operating expenses
• Your business is a tax resident in a country that is on the EU list of non-cooperating tax jurisdictions
• You’re the legal owner who controls the business in Denmark and you’re a tax resident of a country listed on the EU list of non-cooperating tax jurisdictions

You cannot receive salary compensation for the following:

• If you have employees who benefit from other public support (except flex jobs)
• If your business has already dismissed employees
• If you’re a CEO
• A business owner who owns 25% or more of the business

Apply for salary compensation here

#5: Organizer of Major Events

As an organizer of a major event cancelled, postponed, or substantially altered due to COVID-19, you may be compensated for lost revenue.

The Organizer Scheme applies to events from 6 March 2020 through 31 August 2020.

The application deadline is 31 December 2020.

Who can apply?

• A ‘cancelled’ event is when you have been forced to cancel your event completely. Here you can apply for compensation for the financial loss that the cancellation of the event has caused.
• A ‘postponed’ event is when you have postponed your event to a later date because the originally scheduled date has changed. If the event has been postponed, you can only apply for compensation for the additional costs caused by the postponement. 
• A ‘significantly changed’ event is when your event has been held with significantly fewer or completely without participants/spectators compared to what was originally planned. Here you can apply for the deficit that the significant change in the event has resulted in.
• For all cancelled, postponed and significantly changed events, the organizer is obliged to have actively tried to avert losses and limit the extent of the loss.

If you are applying for compensation for several events in the period 6 March to 31 August 2020, you must submit only one overall application.

To apply, your company must have a Danish CVR number and have been established by 6 March 2020.

Event and applicant requirements:

• The event was scheduled to happen between 6 March 2020 and 31 August 2020
• An event having more than 350 simultaneous participants
• The event took or was going to take place less frequently than daily; i.e. at most every other day

OR

• to take place daily for a limited period of time up to 28 days

Apply for compensation as an organizer of major events

Your Business will Need a Statement From an Independent & Approved Auditor

If the total amount of compensation applied for exceeds DKK 500,000, you must attach an auditor’s statement from an independent, approved auditor when you apply. This also applies if you apply for compensation for several different events, which in total exceed DKK 500,000. If you have previously been paid compensation, these events must also be included in a joint auditor’s statement. The Danish Business Authority has prepared a template for the auditor’s statement for the organizer scheme, which must be used.

Find an independent certified public accountant 

Auditor’s Statement Template (Word)

#6: Fixed Expenses Compensation

The good news is that businesses across all industries may receive compensation for fixed expenses. 

Your business can receive compensation for up to 80% of the expected fixed costs and a maximum of DKK 110 million. 

You can apply for fixed costs compensation for either 3 or 4 months from 9 March to 8 June 2020 or up to 8 July 2020. If your business was forced to close during COVID-19 in Denmark, you may be compensated for all of your business’s fixed costs for that exact period.

The application deadline for the compensation scheme is 31 August 2020.

Who can apply?

Your business must have a Danish CVR number, be established by 9 March 2020 and have fixed costs for at least DKK 12,500 in the period from 9 March to 8 June 2020.

In addition, as a result of COVID-19:

• expect a turnover decline of at least 35% throughout the period

OR

• for a period of time have been prohibited from keeping the business open

Your Business will Need a Statement From an Independent & Approved Auditor

To be able to apply for compensation for your company’s fixed costs, you must have an independent, certified accountant to attach a statement that you have calculated revenue and fixed costs correctly and whether the business has had operating deficits in 2019.

Your auditor must submit their statement before processing the application here

Apply for Fixed Expenses Compensation

#7: Extended Reimbursement for Employees on Sick Leave

Employers and the self-employed have the option of extended reimbursement or sickness benefits due to COVID-19 in Denmark.

Employers

As an employer, you can apply for reimbursement for employees who are on sick leave and for employees who are exempt from their work obligation (see below).

In Case of Illness

• Until the end of 2020, as an employer, you can receive reimbursement from the first day of the absence of employees who are ill, believed to be ill or in isolation due to COVID-19. 
• As an employer, you may also receive reimbursement for employees who are unable to perform their work due to a recommendation from the health authorities due to specific COVID-19 conditions. For example, recommendations to stay at home after returning from abroad.

Apply for a refund via NemRefusion at Virk

By Exemption From Work

Employers can receive reimbursement for employees who are exempt from their work obligation from 20 May to 31 August 2020. 

This is because they themselves or their relatives are at an increased risk of serious illness when infected with COVID-19 and it’s not possible to organize the workplace or change the tasks in accordance with the guidelines of the National Board of Health, nor is it possible to work from home. 

The reimbursement is conditional on the employee fulfilling the conditions for the entitlement to sickness benefit, but not the requirement to be incapacitated.

Apply for a refund via NemRefusion at Virk

Self-employed

As a self-employed person, you can receive sickness benefits from the first day of absence until the end of 2020 if you are ill, believed to be ill or in isolation due to COVID-19. 

As an independent, you may also receive sickness benefit if you’re unable to perform your work due to a recommendation from the health authorities due to specific COVID-19 conditions. This may, for example, be a recommendation to stay at home after returning from abroad.

Self-employed persons must report absences using a paper form, which can be found at Virk. This form must be submitted to your municipality.

Self-employed persons can apply for reimbursement here

For any further information regarding application for funding due to COVID-19, you can contact me at shamiel@ubuntubiz.dk