Just under 9,000 companies in Denmark will from June 1st be obliged to repay special loans that were made available during the Covid-19 crisis.
The companies must pay back loans amounting to a total of around 5.3 billion kroner, the Danish Tax Authority (Skattestyrelsen) said in a statement.
The loans due for repayment, termed “A-skattelån 3”, are one of eight different types of loans created during the Covid-19 crisis.
The purpose of the loans were to provide money to companies so that they could survive the financial impact on their operations caused by Covid-19 lockdowns and restrictions.
The Tax Authority created the loan schemes at short notice to enable the money to be paid out and have an effect as quickly as possible.
“That was the main purpose and the efforts were successful,” Danish Tax Authority technical director David Fjord Nielsen told news wire Ritzau.
“Now the time has come for large parts of the loans to be paid back,” Nielsen said.
Should a company have difficulty meeting repayment obligations, it can take out a repayment plan with the Tax Authority allowing the loan to be repaid in two-weekly or monthly payments over a period of up to 12 months.
But companies are encouraged by the tax agency to look into other ways of clearing the loans, as this may be preferable in terms of interest and repayment schedule.
“From a lawmaker’s point of view, it was not the intention of the Danish Tax Authority to compete with the market, and I would therefore stress that a repayment plan with us is typically not the cheapest option for financing,” Nielsen said.
“Companies are encouraged to check whether they might get a better deal somewhere like their own bank,” he said.
Around 100,000 Covid-19 loans must be repaid to the Danish state during 2022 and 2023. Those loans are distributed across just under 48,000 companies and amount to a total of around 34 billion kroner.
Tax Authority figures show that almost 14.5 billion kroner has already been paid since April 1st this year, the date the first loans became due for repayment.
