PORTUGAL Trends and Developments Contributed by: João Riscado Rapoula and Hugo Leonardo, VdA
the redemption of units, sale of units or liquidation of the Fund are also exempt from taxation in Portu - gal. This offers an attractive edge for those looking to maximise returns in a modern, investor-friendly environment. This favourable regime clearly contrasts with the general rules applicable to Portuguese tax residents, whose capital gains are typically subject to a tax rate of 28% for individuals and up to 19% (plus municipal and state surcharges, if applicable) for corporate entities. With these robust and transparent structures, Portu - gal offers a strong foundation for real estate invest - ment, combining legal certainty, sector maturity and tax efficiency. This makes the Portuguese market a compelling choice for institutional and private inves - tors seeking stable and sustainable growth. “SIFIDE” – Tax Incentive System for Business R&D Portugal’s commitment to innovation is exemplified by its SIFIDE programme (“ Sistema de Incentivos Fiscais à Investigação e Desenvolvimento Empresarial ”), a tax incentive regime designed to accelerate research, development and technological advancement across all sectors. In a nutshell, SIFIDE enables companies operating in Portugal to directly reduce their CIT liability by deducting a substantial percentage of eligible R&D expenses. Eligible costs include personnel expenses for researchers and technical staff, purchase or leas - ing of scientific and technical equipment, patent reg - istration and intellectual property protection, as well as outsourced R&D activities carried out with certified institutions. According to this regime, companies can deduct 32.5% of annual qualifying expenses (base rate), with an incremental deduction of 50% applied to any R&D spending exceeding the average of the previous two financial years – up to a ceiling of EUR1.5 million annually. Unused credits can be carried forward for up to eight years, providing flexibility and sustained support for longer-term innovation strategies. Beyond direct corporate tax benefits, SIFIDE is designed to actively support the creation of high- value R&D roles within companies. Personnel whose
costs qualify under SIFIDE may also be eligible for the IFICI regime – Portugal’s special personal income tax treatment for R&D professionals (as described below) – offering additional attraction for top talent. For investors and corporate leaders, SIFIDE repre - sents a compelling opportunity to drive innovation, enhance competitiveness and expand Portugal’s role in the global knowledge economy. The programme is regularly updated to ensure its alignment with inter - national best practices and the dynamic needs of innovative enterprises, making Portugal a strategic destination for research-driven investment. Tax Incentive for Scientific Research and Innovation (IFICI) The IFICI (also commonly known as NHR 2.0) replaced the previous Non-Habitual Resident (NHR) special tax regime, providing benefits close to the NHR, but with a much more limited and targeted scope. This recently introduced regime allows for reduced taxation for individuals who move their tax residency from abroad to Portugal, if the same individuals have not been qualified as Portuguese tax residents in any of the previous five years, over income received on account of employment relationships or provision of services carried out in Portugal, if certain additional conditions are met. Income derived from the activities listed below may be taxed in accordance with the rules of the regime in question: • teaching careers in higher education and scientific research; • jobs and members of governing bodies with con - tractual benefits related to productive investment specifically established in Portuguese law; • highly qualified professions as defined in Ministerial Ordinance 352/2024/1, developed in: (a) companies that are benefiting (or have ben - efited in the last five years) from the tax regime to support investment (RFAI); and (b) eligible industrial and service companies that export (or have exported in the last two years) at least 50% of their turnover;
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