SkatteFUNN: What Your Business Needs to Know Now

Does Your Company Use the SkatteFUNN Scheme?

Important Clarification: Capitalized R&D Costs

An ongoing clarification process within the Ministry of Finance could have significant implications for companies with SkatteFUNN projects. The core issue is whether costs that must be capitalized for tax purposes, typically development costs in successful projects, can be included in full in the SkatteFUNN tax credit base, or only through annual depreciation deductions.
 

The Norwegian Tax Administration has adopted a restrictive interpretation, based on two decisions from the Tax Appeals Board and guidance in the Tax ABC 2025/2026. The consequence may be that companies developing intangible assets, such as software, technology, or patents, effectively receive no SkatteFUNN deduction for direct project costs during the project period.
 

Several stakeholders, including the Norwegian Institute of Public Accountants, have requested clarification from the Ministry of Finance. The Institute argues that the wording of the regulations does not support the restrictive interpretation adopted by the tax authorities and has requested a response by November 2026. It has also argued that any tightening of the rules should not be applied retroactively. So far, the Ministry has not provided any indication of the outcome or timing of its clarification.
 

Proposed Changes from 2027

In addition to the clarification issue, the Ministry of Finance has circulated several proposals to tighten the SkatteFUNN framework, with planned effect from the 2027 income year. The proposals are intended to address identified misuse of the scheme and range from stricter application requirements to changes affecting corporate groups and foreign costs.

Key proposals include:
 

• Deductions would only be available for costs incurred after project approval by the Research Council of Norway. At the same time, the current 1 September guarantee deadline would be removed.
• A group-wide cap would be introduced, meaning the NOK 25 million limit would apply to the entire corporate group rather than to each company individually, as is the case today.
• Stricter documentation requirements would be implemented, including more detailed information on staffing, expertise, and financing, as well as a board-approved financing plan.
• Restrictions on costs incurred outside the EEA would be expanded from R&D services only to cover all categories of costs.

Not all proposals move in a stricter direction. On the positive side, it is proposed that income from prototypes and pilot projects should no longer reduce the eligible deduction base.
 

The proposals have received mixed reactions. Several consultation respondents have argued that the measures may affect a broader range of businesses than intended, including companies carrying out genuine R&D activities rather than only the non-compliant actors the proposals are designed to target.
 

Transitional rules have been proposed through 2029, but the Ministry has not indicated when the consultation process will be followed up with a formal legislative proposal.
 

What Should Your Company Do Now?

1. Identify capitalizable costs and align expectations with your auditor. If your company has ongoing or planned SkatteFUNN projects, you should assess which project costs are, or may become, subject to capitalization requirements. Well before filing, discuss the expected basis for auditor certification for the 2025 and 2026 income years.
2. Assess the impact of the proposed changes. The proposals may mean that deductions are only available for costs incurred after project approval, that the NOK 25 million limit will apply at group level, that documentation requirements become more extensive, and that restrictions on non-EEA costs are broadened. At the same time, income from prototypes would no longer reduce the deduction base. Consider which of these changes may be relevant to your business.
3. Monitor the clarification process. The Ministry of Finance is expected to provide guidance during autumn 2026. The outcome could affect both existing and future SkatteFUNN applications.