The previous non-habitual resident programme, NHR in Portugal, has been replaced with the tax incentive for scientific research and innovation, the IFICI in Portugal. The tax incentive aims to attract qualified professionals to the country, thus creating important opportunities for those who immigrate to Portugal. Below, our team provides more information about this tax incentive.
| Quick Facts | |
|---|---|
| Assistance for individuals working under the IFICI regime | We can help you apply for the flat personal income tax rate by checking if you qualify and the assist with the application. |
| Assistance for companies hiring employees under the IFICI regime | Our Portuguese specialists can analyse your company’s activities to determine suitability for this regime. |
| Full program name | The Tax Incentive for Scientific Research and Innovation (IFICI) |
| Program scope | Attracting qualified employees for companies in specific business sectors |
| Targeted industries | Scientific research and development, technology and information, engineering, others. |
| Sector-specific conditions | Can vary according to the targeted industry |
| Personal income tax reduced under the IFICI | 20% flat rate |
| Type of income the flat rate applies to | Net income |
| Types of employment to which the IFICI reduced tax applies | Employment and self-employment |
| Personal income tax in other cases | Individual income tax rate varying according to taxable income |
| IFICI flat rate validity | 10 years |
| Conditions for qualification – tax residency | The applicant must become a tax resident in Portugal in the year the application is made. |
| Conditions for qualification – tax residency limitation | The applicant must not have been a tax resident in Portugal within the 5 years prior to the application date. |
| Conditions for qualification – personal qualification | The applicant must show proof of relevant qualifications for working in the specialized industry |
| Registration with the competent authority for this regime | Mandatory |
Table of Contents
Tax benefits under the IFICI program
The tax incentive for scientific research and innovation is designed to attract scientists and other highly qualified professionals to Portugal.
At the same time, the IFICI program encourages not only the employment of said professionals, but also investors in Portugal who will open companies in certain scientific sectors.
Our immigration lawyer in Portugal lists the main tax benefits that apply under the IFICI regime:
- 20% on employment and self-employment income derived from eligible scientific activities;
- A tax exemption for foreign-source income, as long as it is not derived from pensions and some tax havens;
- A validity period of 10 years, starting with the first year in which the applicant obtains Portuguese residency;
- An important condition for eligibility is not having been a tax resident in Portugal for 5 years prior to applying for the IFICI regime.
The tax incentive for scientific research and innovation was introduced in Portugal after the Government ended the previous non-habitual residency scheme, which was offering favourable tax policies to qualifying individuals and had been successful among expats who were becoming tax residents in the country.
The IFICI regime also applies the 20% flat rate on income from certain types of activities. The same flat rate was used with the NHR scheme.
The infographic below summarizes the main characteristics of the IFICI:
Eligibility criteria for the IFICI in Portugal
Apart from meeting the requirements listed above by our team, such as not having been a tax resident in the previous five years, employees who want to benefit from the IFICI tax regime must meet the following:
- Have a proper higher education in scientific research. Scientists, university professors, and research grant holders can qualify;
- Be appointed for a highly qualified position in a company that engages in scientific activities and these are considered relevant to the country’s economy;
- Have a role in a company that is involved in certain research and development activities;
- Have another role in a certified startup. The applicants must hold PhD in some cases and a minimum number of years of proven professional experience is also required.
If you want to immigrate to Portugal as a scientific researcher or as a party otherwise qualifying for the IFICI regime, our team can give you more details.
How to move to Portugal and benefit from tax incentives
Relocating to Portugal for employment or business reasons involves several steps. In all cases, a person who wants to apply for the special tax regime will have to be a tax resident. This means spending more than 183 days in the country in a 12-month period and becoming a habitual resident.
Temporary and permanent resident permit holders can apply. For the purpose of the IFICI regime, they must be registered with the Portuguese tax authorities and have a tax identification number. If you plan on relocating to Portugal for medium to long-term purposes, making the registrations with the authorities and obtaining the NIF number are part of the process.
If you are interested in moving to Portugal and are a qualifying professional, our team can give you personalized information about the tax incentive for scientific research and innovation. With our help, you can better understand what will be required of you, from a taxation perspective, once you start residing in Portugal.
Contact our immigration lawyer in Portugal for more information on the IFICI and how we can assist you even before you relocate to the country.