The Government has announced that it will increase allocations to the industry-oriented tax-deduction SkatteFUNN scheme by roughly NOK 100 million in 2014.
The SkatteFUNN scheme is a rights-based, tax deduction scheme targeting Norwegian businesses that are carrying out research or development projects. During the scheme's roughly ten years of existence, 30 000 ideas for industry-oriented projects have been submitted and close to 10 000 enterprises have applied for a tax deduction.
A positive development for a key initiative
The Government will set out the details of the proposed increase to the scheme's budgetary framework in the National Budget for 2014, to be presented this autumn. Enhancing the SkatteFUNN scheme is part of a national growth package being proposed to prevent the further division of Norwegian industry into petroleum-based vs. land-based activity.
“The Government’s decision to allocate more to the SkatteFUNN scheme is very positive. We know the initiative really contributes to research and innovation across the entire spectrum of Norwegian trade and industry,” says Anne Kjersti Fahlvik, Executive Director of the Division for Innovation at the Research Council of Norway.
"Almost all of the businesses that have received a tax deduction under the scheme report that their projects achieve their objectives and that participation in the scheme facilitates positive developments such as increased value creation, enhanced expertise, internationalisation and network-building," Ms Fahlvik states.
NOK 10 billion towards innovation
"For many companies, embarking on a SkatteFUNN project is the first step towards further research and development activity and a door-opener to other funding schemes that promote greater research and innovation efforts in Norwegian industry," Anne Kjersti Fahlvik explains.
"Businesses use the SkatteFUNN scheme in order to improve and accelerate the results of their development activities, and to reduce the risks associated with development."
Combined investments in projects under the scheme total NOK 56 billion. This has resulted in a total tax deduction of over NOK 10 billion for participating companies.
A well-known, popular initiative
Minister of Trade and Industry Trond Giske confirms that the SkatteFUNN scheme is an important part of efforts to encourage innovation in Norwegian trade and industry: "The SkatteFUNN scheme has become well-known in industrial circles. The submission of 30 000 applications attests to the popularity of the initiative as well as to its success," he says.
"To succeed economically in the years ahead, Norway is dependent on the ability of trade and industry to think in new ways. We know that the SkatteFUNN scheme leads to more research and innovation throughout the business sector. And that is why this scheme is important," Mr Giske states.
Includes development projects
There are still companies carrying out research and development that are unaware of the tax deduction or project support under the SkatteFUNN scheme. Anne Kjersti Fahlvik of the Research Council would like to see more businesses apply.
"Many companies whose activities are more associated with development than research do not realise that the SkatteFUNN scheme is relevant for them as well. Still, as much as 80 per cent of the projects carried out under the scheme are actually development projects," Ms Fahlvik explains.
"The scheme can be used to bolster companies' efforts to improve products or services already existing in the market and to apply existing knowledge in new ways or in different contexts from what they do today," she adds.
Key facts about SkatteFUNN
- The SkatteFUNN scheme is a rights-based, tax deduction scheme for all of Norwegian trade and industry ' from the company that has never carried out an R&D project before to the research-intensive company seeking to step up their activities or implement innovation efforts targeting areas or problems other than those they have worked with previously.
- The scheme makes it possible for enterprises subject to taxation in Norway to receive a tax deduction of up to 20 per cent of the costs related to research and development projects. Both industrial research and experimental development projects may be qualified for participation under the SkatteFUNN scheme.
- To be eligible under the SkatteFUNN scheme, projects must aim to produce new insight needed to promote new or improved products, services or production methods.