Frequently asked questions about SkatteFUNN

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• General questions about applying
• Approval and rejection
• Collaborative projects
• Questions about financial matters
• Changes in the project along the way

General questions about applying

Is there an application deadline?

We recommend submitting an application as early as possible in the calendar year. The warranty deadline is 1 September each year. All applications submitted before this date are guaranteed to be processed before the end of the year. Applications received after the guarantee deadline are not guaranteed to be processed before the New Year. The companies that apply after the guarantee deadline may thus lose the opportunity to enter deductions for costs in the year of application.

Can I apply for approval for several years at the time?

Yes, you can apply for SkatteFUNN funding for projects with a duration of several years. Approval is normally granted for up to three years at the time. The approved period is stated in the response letter from us.

Can I apply for several projects in the same application?

No. You must only describe one project per application. A SkatteFUNN project must be delimited and targeted. If you describe several different projects in one application, there is a risk that the project will not be considered to be delimited and targeted (video in Norwegian).

Can the company have several SkatteFUNN projects at the same time?

Yes. A company can have several SkatteFUNN projects at the same time, and they can apply for several SkatteFUNN projects in the same year. You must submit one application per project. The upper limits for tax deductions are still debt per company per year. See more information under collaborative projects.

If the company is being established: Can an applicant in another name and later transfer the application?

No. It must be an established company and there must be an organisation number before a SkatteFUNN application can be created and submitted. It is not possible to move one application or an approved project from one company/one org.nr. to another. See more info under changes to the project along the way.

Is it possible to apply for SkatteFUNN if the company is NUF-registered?

Yes, as long as the company is liable to pay tax in Norway. (In case you as a reader are wondering: NUF stands for Norwegian-registered foreign company. Foreign companies that intend to carry out business activities in Norway must register in the Register of Business Enterprises as "NUF".)

Can SkatteFUNN be combined with other support schemes?

Yes, it is possible to combine support for a project from different schemes. In accordance with the state aid rules, there will nevertheless be some limitations on the proportion of public funding a project can receive. The state aid rules (ESA) provide a framework for the possibility of granting public contributions that are permitted in the financing of a research and development project. Please note that it is important to determine the order in which you apply for SkatteFUNN in combination with other support schemes.

Approval and rejection

Can I appeal against limitations and refusals?

Yes, you can appeal rejections, limitations in the approval and categorization of the project as a development project. Read about the processing of complaints in the SkatteFUNN scheme. It is a good idea to read the assessment criteria for the scheme carefully before you apply.

Collaborative projects

Do both companies in a collaborative project have to submit an application?

Yes. If two or more companies collaborate on a SkatteFUNN project, they must each submit their application in which they describe their contribution to the project.

What kind of support can a company receive from a collaborative project?

In the case of collaborative projects, the framework for the deduction basis is NOK 25 million per year collected for the companies. This means that the debt for the cooperation project will be reduced in total per year.

Questions about financial matters

Does my company fit the category of small and medium-sized companies or large companies?

The corporate greatness has enough to say for the sake of collecting public support a project can get. Small businesses have fewer than 50 employees and an annual turnover or balance sheet that does not exceed 10 million euros. Medium-sized enterprises have fewer than 250 employees and an annual turnover not exceeding 50 million euros or a balance sheet not exceeding 43 million euros.

The category in which the company is placed also depends on ownership and connections to other companies as described in Section 16-40-5 of the Regulations to Section 16-40 of the Tax Act of 26 March 1999. In the context of SkatteFUNN, a company will be regarded as a large company if it has 250 employees or more employees together with the owner company, or if the companies' turnover exceeds EUR 50 million in total.

See also guidance on this on the Guide for SME definition.

Can expenses for a patent application be included in the application?

Yes. SMEs can charge expenses for first gong patenting, in accordance with the SkatteFUNN regulations § 16-40-6, 4.

Small and medium-sized enterprises are entitled to a deduction for costs associated with first-time patenting. The deduction applies to all costs prior to the grant of the right in the first jurisdiction, including costs related to the preparation, filing and follow-up of the application as well as the costs of renewing the application before the right is granted.

What is the upper frame for the SkatteFUNN project?

The framework is NOK 25 million per company per year. This means that the project costs applied for per year can be a maximum of NOK 25 million. Read about the framework and investment rate in SkatteFUNN. Note that the limit is both debt per project per year (total costs across companies) and per company (taxpayer) per year. If a company has several SkatteFUNN projects, then the upper limit also applies to all the projects combined.

What does one mean by research or development (R&D)?

The project must be targeted and delimited (video in Norwegian). It must be difficult to separate the project from the normal activities of the company and operations. The goal of the diver must be to acquire new knowledge or new skills (video in Norwegian) or to use existing knowledge or skills in new ways or areas, in connection with the development of new or improved goods, technology or production processes (video in Norwegian), and this must be of benefit to the company.

Does it matter whether the work packages in the project are classified as research (R) or development (D)?

Yes. Classification as research or development may have financial significance if the SkatteFUNN support is combined with other public support for the project. The classification has no bearing on the deduction of the tax deduction. Read more about the difference between industrial research and experimental development.

What is the maximum hourly rate for property employees in the project?

The hourly rate is 1.2 per thousand of the agreed and actual annual salary at the end of the project period or income year. The maximum hourly rate is NOK 700 and will also apply to purchased R&D from so-called related companies. Read more about the framework on our information page on project management.

Is the budget in the application binding?

No, the budget is not binding, but we want a good estimate. It is the actual costs you have incurred in the project that will be included in the basis for the deduction. The cost may be higher or lower than what you budgeted for in the application, but the costs must be linked to the approved project as formulated in the application.

Do I need an auditor to certify my SkatteFUNN accounts when the company is exempt from the auditor obligation?

Yes. Everyone who claims a tax deduction under the SkatteFUNN scheme must have an auditor's certificate for the claim that is reported through the tax return. This means that the auditor certifies the costs and confirms the information on public aid. This debt regardless of whether the taxpayer is subject to the audit obligation or not. Figures that are to be included in the annual or final report to the Research Council before 1 March do not need auditor approval.

We had costs on the project before we got the application approved. Can we list these?

Yes, if they had the costs in the same calendar year as they were approved for, then they can, but not if they are from the year before.

We have costs on the project that will be paid after the end of the project. Can we list these?

Yes, if the costs come within the same calendar year that they got approval for, then they can.

Can I get approved for costs that accumulated last year?

No. SkatteFUNN approval of debt per calendar year. It is not possible to get a tax deduction for expenses in the year before they apply.

How is the deduction calculated in a company where the owners only partially, or not at all, take out wages?

They can only include actual wages paid – actual costs. Unpaid work effort cannot be included.

Personnel costs must be calculated based on the number of hours R&D personnel perform on the project at an hourly rate of up to 1.2 per thousand of the agreed and actual annual salary. This applies to all taxable businesses, including sole proprietorships. See also the Tax Administration's Tax ABC for Research and Development Costs – SkatteFUNN.

Do the numbers from the annual and final reports of the Research Council have to be certified by an auditor?

No. Enter as good figures as possible from the project accounts at the time of reporting.

Can I enter expenses for accounts and auditors or for writing applications?

No. Costs incurred by the company in connection with the application for approval of the project and auditor confirmation in an attachment to the tax return cannot be included in the basis for the deduction.

Can I get a tax deduction on interest on loans I take out that are linked to the project?

Yes, but borrowing costs to finance salaries are not included. See the Tax Administration's Tax ABC for Research and Development Costs - SkatteFUNN - Financing costs/interest on debt for retail items.

Where can I find out more about entering costs in a budget?

See the Tax Administration's Tax ABC or contact your local tax office.

Changes in the project along the way

Is the progress plan binding?

It is possible to move the approved activities and sub-goals across years, within the approval period. If you need more time beyond the approval period, you must submit a new SkatteFUNN application in which the remaining activities are described. Of course, the question of extension is over.

Can I get a tax deduction for activities that are not described in the application?

No. It is just hard to get a deduction for activities you have applied for and received an approval for.