Denmark gives businesses extra time to pay back coronavirus loans

Denmark gives businesses extra time to pay back coronavirus loans
Danish tax minister Morten Bødskov. Photo: Martin Sylvest/Ritzau Scanpix
A cross aisle majority in the Danish parliament has rubber stamped a deal allowing businesses extra time to repay money loaned from the state during the coronavirus crisis.

The agreement was confirmed by the Tax Ministry on Thursday.

“The government wishes to help those businesses which can be in a difficult situation now that loan repayments are due,” tax minister Morten Bødskov said in a press statement.

The ministry said that around 61,000 loans to companies paid out during the pandemic, totalling just under 22.5 billion kroner, will be now be encompassed by more lenient repayment terms.

The deadline for repayment has been extended to April 1st, 2022.

Additionally, an instalment option will allow companies to place their loans with tax authorities and pay them in instalments up to April 1st, 2024.

The instalment option will incur interest of 0.7 percent per month or 8.4 percent annually. That is to prevent unfair competition between the state and banks.

Parliament allowed businesses impacted by the coronavirus shutdowns to take loans by not paying VAT (moms in Danish).

The unpaid VAT then took the form of a loan on the business’ tax account.

The aim of this measure was to stop businesses from taking loans in order to pay their tax bills.

READ ALSO: More name changes, less immigration: The surprising (and unsurprising) stats from Denmark’s Covid-19 crisis

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