On December 23, 2024, the Portuguese government introduced a groundbreaking regulation under Portaria n.º 352/2024/1 aimed at fostering innovation and driving competitiveness in the national economy. Effective January 1, 2024, the Fiscal Incentive Regime for Scientific Research and Innovation (IFICI) sets the stage for a more innovative and globally competitive Portugal.
What is the IFICI?
The IFICI is a new fiscal regime designed to provide tax benefits for professionals and businesses engaged in scientific research, innovation, and high-value-added activities. This initiative aligns with Portugal’s vision to attract international talent, support advanced industries, and encourage investments in innovation.
Key Benefits
- Reduced Tax Rate:
- Eligible income from work (Category A) and independent activities (Category B) will be taxed at a reduced rate of 20%, significantly lowering the tax burden for qualified individuals and companies.
- Eligibility Criteria:
- Individuals: Professionals working in highly qualified roles such as researchers, IT specialists, university professors, and engineers (detailed in Annex I).
- Companies: Industrial and service businesses involved in innovation and exporting at least 50% of their turnover, or those operating in strategic sectors outlined in Annex II.
- Simplified Application Process:
- Applicants must submit their requests by January 15 of the year following their fiscal residency. Supporting documentation includes employment contracts, certifications, and proof of eligibility.
- Focus on High-Impact Sectors:
- Priority is given to industries including manufacturing, health sciences, information technology, education, and advanced research and development (R&D).
- Integration with National Goals:
- The IFICI is part of Portugal’s broader effort to establish itself as a hub for innovation, attract global talent, and drive economic growth through increased productivity and advanced skill development.
How to Apply
Professionals and businesses must submit applications to one of the designated entities, depending on their activity:
- Foundation for Science and Technology (FCT): For roles in academia and research.
- AICEP or IAPMEI: For corporate and startup activities.
- Tax Authority (AT): For professionals in highly qualified positions.
Transition Measures
For those earning income in 2024, a transitional arrangement extends deadlines until March 15, 2025, ensuring that applicants can benefit from this new regime with minimal administrative hurdles.
Why It Matters
The introduction of the IFICI marks a pivotal moment in Portugal’s journey toward economic modernization. By providing a favorable tax environment, the government aims to:
- Attract top-tier talent to Portugal.
- Support businesses in expanding their innovation capacities.
- Boost exports and global competitiveness.
Final Thoughts
Portugal’s commitment to innovation is clear, and the IFICI is a critical step in positioning the country as a leader in research and technology. Whether you are a professional seeking opportunities in Portugal or a business aiming to expand your R&D efforts, this new regime offers a compelling incentive to grow and thrive.
For more details, consult the full text of Portaria n.º 352/2024/1 or contact your tax advisor to explore how the IFICI can benefit you.
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