The SkatteFUNN R&D tax incentive scheme is a government program designed to stimulate research and development (R&D) in Norwegian trade and industry. The incentive is a tax credit and comes in the form of a possible deduction from a company’s payable corporate tax.
All branches of industry and all types of companies can apply for support from the SkatteFUNN Tax Incentive Scheme. To be eligible to apply for SkatteFUNN, the company must seek to develop a new or improved product, service or production process through a dedicated R&D project. The project must generate new knowledge, skills and capabilities within the company.
In order to be eligible, the company also needs to be incorporated in Norway and liable to pay corporate tax to Norway. If the tax credit for the R&D expenses is greater than the amount the firm is liable to pay in tax, the remainder will be paid out in cash to the firm. If the applying company does not generate a taxable income, the entire SkatteFUNN credit is paid out in cash.
SkatteFUNN is open to all companies with a permanent establishment in Norway as long as the R&D costs can be attributed to future earnings of the Norwegian company.
All SkatteFUNN project applications are processed and evaluated by the Research Council of Norway. In order to claim R&D tax credit, the company must have their project approved by the Council. The Council evaluates the project plan with special emphasis on its R&D content.