Portugal has taken a significant step in fostering innovation and attracting global talent with the publication of Decree No. 352/2024. This regulation introduces theTax Incentive for Scientific Research and Innovation (IFICI– or, as we call it in English, TISRI), a framework designed to strengthen Portugal’s economic competitiveness by offering attractive tax benefits to highly skilled professionals and innovative companies. The decree aligns with Article 58-A of the Portuguese Tax Benefits Statute, establishing a comprehensive approach to incentivizing research, development, and job creation in key industries.
The regime offers aspecial 20% flat tax rate on personal income (IRS)for earnings derived from employment or self-employment in eligible activities, including scientific research, innovation, and highly qualified roles. In addition,foreign-sourced passive income, excluding pensions, will be fully exempt from taxationfor beneficiaries of this regime. This dual benefit aims to make Portugal an attractive destination for international talent and high-net-worth individuals, while also encouraging companies to invest in high-value sectors. The framework is particularly relevant for individuals in industries such as engineering, health, technology, and academia, providing both competitive tax rates for professional income and relief on most passive global earnings.
Eligibility and Application Process
Applicants must register for the IFICI regime byJanuary 15 of the year following the fiscal year in which they establish residency in Portugal(except for income earned in 2024 – the deadline in 2025 is March 15). Depending on the nature of their activity, applications are submitted to one of several competent entities, including:
- The Foundation for Science and Technology (FCT):For higher education and scientific research.
- The Portuguese Trade & Investment Agency (AICEP):For qualified positions under investment incentive agreements.
- The Portuguese Tax Authority (AT):For highly skilled professionals in companies with significant investments or export-driven revenue.
- IAPMEI:For activities considered essential to the national economy.
- The National Innovation Agency (ANI):For R&D projects eligible for tax incentives.
- Startup Portugal:For roles within certified startups.
What Qualifies as a Highly Skilled Profession? (3rd option)
The decree defines highly skilled professions under specific codes of the Portuguese Classification of Professions. These include:
- Directors of companies and specialized service departments.
- Experts in physical sciences, engineering, and IT.
- Medical professionals and university professors.
- Other roles requiring advanced technical qualifications.
It is important to note that this list of professions applies exclusively to employees of companies with significant investments or export-driven revenue, formally recognized as such.
Eligible Industries and Activities
The IFICI prioritizes industries that are critical to Portugal’s economic growth, including:
- Transformative Industries:Manufacturing and related activities (Divisions 10-33 of CAE).
- Scientific R&D:Physical and natural sciences research (Group 721).
- Information and Communication Technologies:Activities within Divisions 58-63.
- Higher Education and Health Services:Subcategories related to university teaching and advanced medical services
It is important to note that this list of activities applies exclusively to companies with significant investments or export-driven revenue, formally recognized as such.
Key Deadlines
For income earned in 2024, the following deadlines apply:
- Application submission:By March 15, 2025.
- Certification by relevant entities:By April 15, 2025.
- Tax Authority registration confirmation:By April 30, 2025.
Applicants are required to maintain detailed documentation to verify their eligibility, which must be presented to the Tax Authority upon request.
