Covid-19: Subsidy to cover fixed costs

31 March 2020

Latest update on 6 May 2020

Companies losing at least 35% of their turnover as a result of Covid-19 can apply for a subsidy in the shape of a support package from the state to cover their fixed costs for the period 9 March - 8 July 2020. The greater the turnover loss, the greater the subsidy.

The fixed costs subsidy scheme is aimed at the companies worst affected by Covid-19. Those who for a period of time lose between 35% and 100% of their turnover.


Who can apply for the Covid-19 subsidy?

The scheme is available to companies expecting turnover losses for the period 9 March 2020 - 8 July 2020 as a result of Covid-19. The turnover losses must be at least 35% compared to the turnover in the reference period. The company is entitled to cover even if it manages to recover all or part of the lost turnover later in the year.

The new criteria are retroactive to March 9 2020, but today companies can only apply for support according to the old criteria. If the company has already applied it will be covered by the new rules. Note that you will have to apply for compensation for the extended period from 9 June to 8 July 2020 separately.

Companies based in tax havens in accordance with the guidelines from EU cannot recieve compensation to the extent that they can be cut under EU law or any other international obligations. This applies to companies applying for for compensation after the extension of the scheme.


What is the scope of subsidy available with the support package?

The subsidy represents the following proportion of costs:

  • 100% if the company, by public notice or similar, is ordered to be closed and have had no revenue in the period. Thus, a closed restaurant that sells take-away and a closed retail store with online net sales in the period are not entitled to a 100% compensation but a maximum of 80%.
  • 80% for a turnover decrease in excess of 80%.
  • 50% for a turnover decrease of 60-80%.
  • 25% for a turnover decrease of 35-60%.



The maximum compensation as a result of Covid-19 is DKK 110 million per company. For groups with multiple companies, the ceiling applies to each company and the companies must apply separately. Compensation cannot be applied for if the fixed costs total less than DKK 12,500 for the period 9 March 2020 - 8 June 2020.

When submitting the application, it will be required to submit a a solemn declaration, that the companies will not pay dividends or buy back shares in the financial years of 2020 and 2021. This condition only applies to companies that recieve more than DKK 60 million in compensation.


Which costs?

The term “fixed costs” among other things includes:

  1. Rent
  2. Costs for rent and leasing
  3. Expenses for necessary maintenance of fixed assets and leased assets
  4. Electricity, water, heating and cleaning costs
  5. Property Taxes
  6. Software use licenses
  7. Insurance, subscriptions and other fixed expenses
  8. Interest and fees
  9. Depreciation of tangible and intangible fixed assets
  10. Impairment on perishabble goods
  11. Impairment on fresh meat, which is frozen (only applies for butchers etc.)

Costs that are NOT compensated include among other things:

  1. Purchase of goods (consumption of goods)
  2. Salaries (covered by the salary compensation scheme instead)
  3. Costs for sales and marketing
  4. Dispatch costs
  5. Losses on debtors
  6. Debt repayment
  7. Purchase of fixed assets
  8. Major renovations of fixed assets
  9. Provisions and value adjustments
  10. Income Taxes



In connection with applying for the support package, a solemn declaration must be submitted regarding the turnover decrease expectations as a result of the coronavirus. The application must also be accompanied by a statement from a state-authorized or registered auditor - partly on the realized turnover in the company during the reference period (by default 1 April 2019 - 30 June 2019) and partly on the amount of the realized fixed expenses in the company during the period 1 December 2019 - 29 February 2020. Or in special cases a later period. In addition, the statement must include information on the auditor's examination of the income statement for the periode January 1 2019 - December 31 2019, if the company has had a deficit during this period (a negative result).

If the application is accepted 80% of the cost to auditing assistance will be reimbursed, but no more than DKK 16,000 equivalent to an auditor's fee of DKK 20,000 excl. VAT.

After the end of the period, a statement of the actual decline in revenue and actual expenses will have to be submitted. If it in this connection turns out that the company was paid an inadequate compensation, an additional amount will be reimbursed. But the company will also have to repay if they have recieved an overpayment.


We can help you

At BDO, we are fully informed about the regulations for Covid-19-related support packages, meaning that we are not just able to answer your questions, we can also help you fill in the application form and with submitting the required documentation when the time comes.


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