Intention mod virkelighed: Skattekreditordningen for FoU og de praktiske barrierer for software- og techvækstvirksomheder

Intention against Reality: The Tax Credit Scheme for R&D and the Practical Barriers For Software- and Tech Companies

Knudsen, Søren Helgogaard

4. semester

Revision (cand.merc.aud.), Kandidat

2026

2026-01-04

The purpose of this thesis is to examine how Danish tax rules on research and development (R&D) expenditure are applied in practice to innovative software and tech growth companies, and to assess to what extent the tax credit scheme reflects the legislative intention to support innovation, growth, and liquidity. The analysis focuses on sections 8 B and 8 X of the Danish Tax Assessment Act (Ligningsloven). Section 8 B governs the tax treatment of expenditure on experimental and research activities, while section 8 X allows a loss attributable to qualifying R&D expenditure to be converted into an immediate cash refund of the tax value instead of loss carryforward. The thesis applies a primarily doctrinal legal method. It interprets and systematises statutory provisions, legislative materials, administrative guidance, and relevant case law, and combines this with a structured mapping of published administrative and judicial practice in software-related cases. The mapped overview comprises 32 published decisions, of which 16 “core decisions” are selected for in-depth analysis to capture recurring conflict fields in software development. The legal analysis is further supplemented by a fictitious, yet realistic, software growth company case presented in three scenarios (A, B and C) with varying levels of documentation and cost traceability, illustrating how qualification, allocation, and auditability affect access to cash refunds. Across the mapped practice and the case application, the thesis finds that access to a cash refund under section 8 X is strongly evidence- and documentation-driven and depends on cumulative requirements: (1) the underlying activities and expenses must fall within section 8 B and the depreciation rules referenced by section 8 X; (2) the relevant expenditure must be treated as immediately deductible (or immediately depreciable where applicable) in the income year; and (3) the expenditure must be separable and measurable on a verifiable basis. In software projects, the qualifying assessment is typically anchored in a technical baseline “known technique” and in whether the taxpayer can demonstrate technological novelty and genuine technical uncertainty. Business novelty, project complexity, or advanced functionality are not sufficient on their own. Where development is iterative and intertwined with operations, maintenance, and customer-driven changes, the practical bottleneck becomes activity-level delimitation and traceable allocation, supported by stable project definitions, time and resource records, deliverable and invoice linkage, testing and experimentation traces, and consistent allocation principles. Subsequent audit and potential repayment form an integrated part of the scheme’s practical risk profile. The thesis concludes that the liquidity objective can be realised where R&D activities are technically delimited, novelty and uncertainty are made verifiable, and the cost base is allocated in a reproducible manner. At the same time, the analysis indicates that the scheme’s practical effect for software companies depends materially on whether they can meet documentation and allocation requirements that do not always arise naturally from ordinary product and sprint management, which reduces predictability across the intended target group. The thesis therefore identifies improvement tracks aimed at predictability without expanding the substantive scope of the rules, including clearer minimum expectations for documentation in software development, earlier clarification of whether a case is sufficiently specified for a merits assessment, more consistent handling of mixed portfolios through separability and allocation, clearer expectations regarding subsequent audit and partial adjustments, and more operational guidance on verifiable allocation principles for labour and shared costs.

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