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THE SKATTEFUNN SCHEME ACROSS NORWAY:

Tax deductions for research help Norwegian companies take bold steps

Just under 5 000 business enterprises throughout Norway took advantage of the qualification-based SkatteFUNN Tax Incentive Scheme in 2014. “It is easy for companies to apply under the SkatteFUNN scheme,” says Minister of Trade and Industry Monica Mæland. “More companies should do it.”

Fresh budget figures from the Research Council of Norway show that companies under the SkatteFUNN scheme conducted research to the tune of NOK 16.2 billion in 2014. Surveys show that the companies themselves find that a 20 per cent tax deduction for these activities gives them the extra might they need to take new steps towards innovation and restructuring.

Benefits business

SkatteFUNN-supported projects offer major benefits for companies in the form of new products and services, smarter production methods, financial growth, larger networks and, not least, a way of working that boosts competitiveness and restructuring capacity.  

To qualify for a tax deduction, a company must have a project with clearly specified objectives and activities that is approved by the Research Council. To be approved, the project must generate new insight in the relevant subject area or branch of industry.

The SkatteFUNN scheme enables companies to be more adept at restructuring. (Illustration: Forskningsrådet)

Easy to apply

Company surveys in 2014 show that 96 per cent of the companies receiving SkatteFUNN support recommend that other companies make use of the scheme and most report that submitting an application is easy. In cases where the research questions to be addressed are complex, the companies find that dialogue with the Research Council during the approval process results in a more streamlined project plan and better project implementation. 

Also for those that do not turn a profit

The companies themselves must cover 80 per cent of project costs. The widespread interest in the SkatteFUNN scheme, however, reveals just how important the public funding contribution is. The tax incentive scheme is open to all companies that conduct research and development (R&D) activity, even those that are not currently liable for taxation. For companies operating at a loss, SkatteFUNN support is paid out in cash at the time of the annual tax assessment.

NOK 2.7 billion investment in the future

The budget figures indicate that the total tax deduction for project activities carried out in 2014 may amount to NOK 2.7 billion. 

“The Norwegian economy needs more legs to stand on. Thus, it is very important for Norwegian companies to research their way to new products and services. The SkatteFUNN scheme is useful, and it works. Therefore the Government has decided to strengthen the scheme even further,” says Ms Mæland.

The SkatteFUNN scheme in 2014

There were just under 5 000 active projects under the SkatteFUNN scheme in 2014, with budgeted project costs of NOK 16.2 billion and budgeted tax deductions of NOK 2.7 billion. Click on the link to the right for key figures for SkatteFUNN projects for Norway overall and for each county (in Norwegian). The figures are also distributed by sector.

 

Written by:
Beate Nicoline Andersen/Else Lie. Translation: Victoria Coleman/Carol B. Eckmann
Published:
18.03.2015
Last updated:
18.03.2015