An evaluation of the Norwegian tax deduction scheme for companies carrying out R&D activities - the SkatteFUNN scheme - was conducted in 2008. The results made it clear that the scheme promotes increased R&D activity and is being utilised by a large number of companies within most branches of industry.
An article summing up the evaluation was recently published in the international Journal of Technology Management & Innovation. The authors - who come from Statistics Norway and the Norwegian School of Economics and Business Administration - conclude that the scheme in general works as intended and is an effective means of boosting R&D activity in Norway. They point out that it is particularly helpful for smaller companies with little R&D experience.
Click here to download the article.
Eight years' experience - ongoing development
The SkatteFUNN scheme is a rights-based scheme targeting companies that carry out R&D activities. Launched in 2002, the scheme is regulated under the Norwegian Taxation Act and is administered jointly by the Research Council of Norway, Innovation Norway and the Norwegian Tax Administration.
In the wake of the 2008 evaluation, the Ministry of Finance raised the minimum tax deduction from NOK 4 million to NOK 5.5 million and the maximum tax deduction from NOK 8 million to NOK 11 million from 2009. Norwegian companies received a total of NOK 1.2 billion in tax deductions under the SkatteFUNN scheme during that year.
The Ministry is currently preparing new adjustments to the scheme, while the SkatteFUNN secretariat at the Research Council has launched several projects to improve users' knowledge of the scheme and streamline administrative procedures.
