Portugal has long been an attractive destination for expatriates due to its pleasant climate, high quality of life, and tax-friendly environment. With the phasing out of the Non-Habitual Resident (NHR) tax regime, the Portuguese government has introduced a new initiative aimed at continuing to attract skilled foreign professionals: the Incentivo Fiscal para a Inovação e Criatividade Internacional (IFICI+). This new tax benefit program is designed to provide competitive tax advantages for expatriates who establish their tax residency in Portugal, particularly those engaged in high-value professional activities.
The IFICI+ tax benefit offers a 20% flat tax rate on net earnings from employment and self-employment for a period of 10 years. This replaces the NHR regime and serves as an incentive for professionals, entrepreneurs, and researchers in designated fields to relocate to Portugal.
In this guide, we will explore the eligibility criteria, application process, benefits, and important deadlines for this new tax incentive.
Who is Eligible for the IFICI+ Tax Benefit?
To qualify for the IFICI+ program, applicants must meet the following conditions:
1. Tax Residency in Portugal
Applicants must be officially recognized as tax residents in Portugal. This means they must spend more than 183 days per year in the country or have a permanent residence in Portugal that serves as their habitual abode.
2. Non-Residency Requirement
To be eligible, individuals must not have been tax residents in Portugal in the five years preceding their application. This requirement ensures that the program primarily benefits newcomers to the Portuguese tax system rather than those who have already established residency in recent years.
3. Previous Tax Benefits
Applicants must not have previously benefited from the Non-Habitual Resident (NHR) Tax Regime or the Regressar Program. This restriction prevents individuals from accumulating multiple tax benefits over time.
4. Professional Activity Requirement
Individuals must be engaged in high-value professional activities as listed in Article 58-A of the Estatuto dos Benefícios Fiscais (EBF). These professions typically include areas such as science, technology, research, and innovation, aligning with Portugal’s broader economic development goals.
Validation and Approval Process
The approval of an applicant’s eligibility for IFICI+ is a multi-step process that involves different regulatory bodies. The key entities involved in the validation process include:
- Portuguese Tax Authority (Autoridade Tributária e Aduaneira) – Reviews whether applicants meet the legal requirements.
- Sector-Specific Regulatory Bodies – These organizations confirm that the applicant’s professional activities align with the designated fields specified under the EBF.
Applicants are required to submit supporting documentation, and the decision process may take a few months, depending on the complexity of the case.
Required Documentation for Application
Applicants must provide the following documents as part of their application process:
- Employment Contract – For individuals employed by a company in Portugal.
- Commercial Certificate – For business owners or self-employed professionals.
- Scholarship or Research Agreement – If the applicant is engaged in scientific research.
- Academic and Professional Qualifications – To prove eligibility for high-value professions.
- Additional Documents – Any supporting materials requested by the regulatory body.
Beneficiaries of the IFICI+ regime must also report any changes in their professional status by January 15 of the following year, as such changes may impact their eligibility.
Benefits of the IFICI+ Program
The IFICI+ program provides several advantages for eligible expatriates, including:
- Reduced Tax Rate – A 20% flat tax rate on eligible income, significantly lower than the standard Portuguese tax rates.
- Long-Term Stability – The tax benefit is applicable for 10 consecutive years, providing long-term fiscal certainty for foreign residents.
- Attractiveness for High-Skilled Professionals – The initiative is designed to encourage the relocation of experts in key industries, helping Portugal remain competitive in the global economy.
- Enhancement of Portugal’s Innovation Sector – By incentivizing professionals in science, research, and technology, the program fosters innovation and economic development.
Important Deadlines
The application process follows a structured timeline, with different deadlines depending on the applicant’s residency status:
- New Residents (from 2025 onwards): Applications must be submitted by January 15 of the year following the establishment of residency.
- Existing Residents (from 2024): Individuals who established residency in 2024 must submit their application by March 15, 2025.
Applications must be directed to the appropriate regulatory body corresponding to the applicant’s profession, ensuring a smooth validation process.
How to Apply for IFICI+
Applying for the IFICI+ tax benefit involves several steps:
- Confirm Eligibility – Ensure that you meet all the requirements related to tax residency, professional activity, and prior benefits.
- Gather Documentation – Collect all necessary documents, including contracts, certificates, and academic qualifications.
- Submit the Application – Send your application to the relevant regulatory body and the Portuguese Tax Authority.
- Await Validation – The authorities will review your application and confirm whether you qualify for the IFICI+ tax benefit.
- Maintain Compliance – Report any changes in your professional status to avoid issues with your tax status.
Given the complexity of the process, many expatriates choose to seek professional assistance from tax advisors or legal experts specializing in Portuguese tax law to ensure a smooth application process.
The IFICI+ tax incentive represents a strategic move by Portugal to continue attracting talented foreign professionals despite the phasing out of the NHR regime. With its competitive 20% tax rate, long-term benefits, and focus on innovation-driven professions, the program offers a compelling reason for expats to consider Portugal as their new home.
If you are planning to relocate to Portugal and qualify for the IFICI+ program, it is essential to act early, gather all necessary documentation, and meet the submission deadlines to maximize your tax advantages.
For more information and expert guidance, consulting with a professional in Portuguese tax law can help you navigate the process seamlessly and ensure full compliance with all regulations.
