IFICI - The New Tax incentive for Scientific Research and Innovation - VCA

Tax Benefits for new tax residents in Portugal

Following the end of the Non-Habitual Resident (NHR) tax regime, a new tax incentive has emerged to promote scientific research and innovation in Portugal. This regime offers a 20% flat tax rate on income from employment or self-employment within eligible sectors and beneficiary entities, with additional tax exemptions on certain foreign-sourced income.

This incentive is available to individuals, both foreign and Portuguese, who have not been tax residents in Portugal for the past 5 years and work in eligible sectors and entities (as detailed here).

This is not available to former beneficiaries of the NHR or the Programa Regressar.

The incentive is valid for 10 years, provided individuals maintain Portuguese tax residency and work in a qualified activity.

Eligible Professional Activities and Categories

Higher Education and Scientific Research: Scientific employment in entities integrated into the national science and technology system; members of governing bodies in technology and innovation centres.
Qualified Jobs linked to Productive Investment: Positions in entities benefiting from tax incentives for productive investment (Chapter II, Investment Tax Code).
Research & Development (SIFIDE II): Staff whose costs are eligible for the R&D tax incentive system.

Certified Startups: Members of startups recognised under the Startup and Scaleup Law.
Activities in the Autonomous Regions: Work carried out by tax residents in the Azores and Madeira, as defined by regional legislative decree.
Qualified Jobs in Strategic Economic Activities: Qualified positions in companies recognised by AICEP or IAPMEI as relevant to the national economy
Highly Qualified Professions: Specific professions in companies benefiting from the Investment Support Tax Regime or in industrial/service companies exporting ≥50% of turnover.

Key Tax Benefits of the IFICI

Employment Income

20% flat tax rate on income earned in Portugal from eligible activities (instead of progressive rates of 14% to 53%, including solidarity surcharge)
Exemption for foreign-sourced employment and self-employment income

Passive Income

Exemption for foreign dividends, interest, and royalties
Exemption for foreign capital gains
28% rate on capital gains from Portuguese movable assets
Gains on Portuguese movable assets held for less than 1 year or exceeding €86,634/year may be taxed at progressive rates (12.5% to 48%)
Portuguese capital gains on real estate are generally taxed at 6.5% to 24%

Pensions

Portuguese and foreign pensions are taxed at progressive rates (12.5% to 48%)

Cryptoassets

Exempt if held for more than 365 days
Otherwise, taxed at 28%

Application Procedure and Considerations

Deadline

Registration with the Tax Authority: by January 15 of the year following the registration of Portuguese tax residency.

Required Documentation

Official form issued by the Tax Authority;
Employment contract or commercial certificate (if
applicable);
Scholarship contract (for researchers);
Proof of academic qualifications;
Statement from the relevant entity confirming eligibility;
Other documents requested by certifying entities.

Registration with Portuguese Social Security (Segurança Social) is mandatory for income earners.

Self-employed individuals are exempt from contributions in the first year
After this period, contributions are 21.4% on 70% of gross earnings, capped at 12 times the Social Support Index (IAS)

Eligibility requires tax residency each year and continued participation in qualified activities
A change of activity is permitted if the new activity begins within 6 months of the end of the previous one
Regulated professions require proof of compliance with applicable legal standards and regulations

Take Advantage of Portugal’s Tax Benefits

Portugal is positioning itself as a leading destination for global talent, fostering innovation and economic growth. If you are considering relocating or investing in Portugal, our team can guide you through the process.