SkatteFUNN and corporate croups : how changes in the SkatteFUNN scheme affects group structure and firms’ operational expenses
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- Master Thesis 
In this thesis, we have chosen to study the Norwegian R&D tax incentive; SkatteFUNN. The aim of the thesis was to see whether corporate groups optimizes from the scheme by making structural changes with changes in the SkatteFUNN scheme. In addition, we have looked at the number of groups who receives SkatteFUNN, and how much they receive. We have a panel data provided by the Norwegian Tax Administration (Skatteetaten), containing accounting data and data on SkatteFUNN costs from 2005 to 2016. We found a change in the structure of the groups every time there was a change in the SkatteFUNN scheme. For example, one of our regressions implies a small decrease in the number of firms in groups after a change in the SkatteFUNN scheme in 2014. The coefficient for the treatment variable after 2014 was -0.069 and was significant at a one percent level. This suggest that the increase in threshold changed the structure of the groups marginally. We also looked at corporate groups and how their SkatteFUNN costs increased over time. Particularly, we looked at groups that reported R&D costs above the purchased R&D threshold for one firm. We noticed a significant decrease in the number of groups exceeding threshold from 2013 to 2014. However, the groups exceeding threshold both in 2013 and 2014 had an increase in SkatteFUNN costs of 48 percent. Because of the large increase in R&D costs between 2013 and 2014, we wanted to see whether the overall level of costs changed for SkatteFUNN reporting firms. Using propensity score matching and a regression analysis, we found a statistically significant increase in operational expenses of approximately 9.7 percent after 2014 for firms receiving SkatteFUNN. Our findings indicate that the structure of the groups changes with a change in the SkatteFUNN scheme. The government should therefore consider group composition when they decide on a change in the scheme. Groups reported approximately 50 percent of all SkatteFUNN costs between 2006 and 2015, and a change in the scheme would affect them particularly. Generally, when the threshold increases, so does the investments in R&D.