State aid: Commission approves €23 million Danish tax deferral schemes to support SMEs affected by coronavirus outbreak

The European Commission has found the modification of an existing Danish wage tax deferral scheme for small and medium-sized enterprises (SMEs), as well as a new approximately €15.4 million (DKK 115 million) tax deferral scheme for medium-sized enterprises affected by the coronavirus outbreak, to be in line with the State aid Temporary Framework.  The existing scheme was approved by the Commission in January 2021 (SA.61233). Denmark notified an increase of approximately €7.6 million (DKK 57 million) in the budget of the scheme, from €4 million (DKK 30 million) to approximately €11.6 million (DKK 87 million). With regard to the new scheme, the public support will take the form of an interest-free credit facility concerning the payment of value added tax (VAT) due by beneficiaries in June 2021 (i.e. the VAT due for the first quarter of 2020). Small undertakings are not covered by the scheme as they have no VAT liabilities in June 2021. The aim of both the modified measure and the new one is to ease the liquidity constraints faced by those SMEs that have been severely affected by the economic impact of the coronavirus outbreak, helping them to continue their activities. The Commission found that the Danish schemes were in line with the conditions set out in the Temporary Framework. In particular, (i) the form of the aid is equivalent to a tax deferral, (ii) the aid will be granted before 31 December 2021, and (iii) the deferred taxes or contributions will be paid out no later than 31 December 2022. The Commission concluded that the measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measures under EU State aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.62998 in the State aid register on the Commission’s competition website.