Point of Liaison with Brazil & PALOP Countries

R&D: SIFIDE programme offers tax incentives to support companies in their research & development. It lowers due CIT by allowing a deduction of R&D expenses. The tax credit rates include a base rate of 32.5% of the expenses and an incremental rate of 50% for the increase in expenses compared to the average of the two previous years, up to a limit of EUR 1.5 mn. For micro, small, and medium-sized entities that have just started their activity and cannot benefit from the incremental rate, the base rate is increased by 15%. Expenses that, due to insufficient tax due, cannot be deducted in the tax year they were incurred can be carried forward for eight years. The scheme is in effect until 2025.

The government is currently working on introducing a new incentive scheme for R&D, based on EU funds (Portugal 2030).

Job creation & CAPEX: RFAI scheme allows companies from different sectors to deduct from the taxable income a percentage of the investments made in tangible and intangible (25% for smaller investments, 10% for the parts of investments exceeding EUR 15 mn and located in the area of Algarve or Lisbon). A maximum deduction limit is of either the total income tax or 50% of the CIT for large entrepreneurs. Other tax benefits include deductions from corporate income tax, exemption or reduction of property tax (IMI), exemption from property transfer tax (IMT; provided on the municipality level), and exemption from stamp duty on the acquisition of real estate.

Additionally, the DLRR scheme offers a tax benefit to micro, small, and medium-sized enterprises. It permits a 10% corporate income tax (CIT) credit on profits that are retained and reinvested in eligible investments within a four-year timeframe from the realization. The deduction is subject to a cap of 12 million euros on the retained and reinvested profits and 25% of the CIT assessed.

For job creation, Portugal offers an internship ‘Ativar’ with a grant for the employer of EUR 690 per month for 9 months for hiring unemployed university graduates aged 45 or under. An additional grant is available if the internships are converted into permanent contracts. When hiring young people that look for their first permanent job (aged 30 or under), an incentive consists of a reduction of 50% of social security contributions for 5 years.

Green & Other: Patent Box is a tax tool in favour of intellectual property rights, such as patents, trademarks, copyrights, computer programmes, etc. It offers a reduced 10% tax rate for income from IP rights and a reduced tax rate, recently increased from 50% to 85% on income derived from intellectual property (developed or acquired after July 1, 2016).

Portugal offers a few residencies (visa) programmes – Golden, StartUp, and Tech. Golden visa is for investors that carry out transfers of capital, or acquisition of real estate. StartUp visa is aimed at entrepreneurs, who plan to create an innovative business in Portugal. In turn, a Tech visa is addressed to companies that wish to attract highly qualified and specialized staff.