WHAT IS IFICI?
IFICI (Tax Incentive for Scientific Research and Innovation) or NHR 2.0, is a Portuguese tax regime, specially developed to increase the country’s objectives, such as innovation, competitiveness and digital inclusion on a global scale.
This new regime was designed to replace the Non-Habitual Resident regime and aims to attract professionals with higher qualifications to Portugal, while offering significantly appealing tax benefits.
AM I ELIGIBLE?
Since the objective is different from the previous NHR regime, there are also changes in the eligibility criteria, therefore to qualify, individuals must be:
- Tax residents in Portugal;
- Not have been tax residents for the last five years;
- Never have benefited from the former NHR regime or from the Programa Regressar;
- Perform a qualifying activity … and possess at least a Level 5 of qualification
You are not a Tax Resident if:
- You own a property in Portugal
- You have a bank account in Portugal
- You have a will in Portugal
- You recieve property income from Portugal
You will become a Tax Resident if:
- You make an application to the Tax Department to register as a tax resident
- You spend 183 days or more in Portugal
- You are under the IFICI regime
BENEFITS
- Tax benefits for a period of 10 years for new tax residents who perform High Added Value Activities in qualifying companies
- Reduced 20% flat rate on domestic professional income
- Tax exemption on foreign professional and investment income (dividends, royalties, interest, capital gains) and property income
What are the Benefits?
| Type of Income | NHR | “NHR 2.0” (IFICI) |
|---|---|---|
| High Added Value Activities | 20% Flat Tax Rate | 20% Flat Tax Rate |
| Dividends | 0% | 0% |
| Interest | 0% | 0% |
| Capital Gains | 0%–28% | 0% |
| Pensions | 10% | 0%–53% |
Application Process
- The individuals must apply for the NHR 2.0 regime by 15th January of the year following the one in which they became a Portuguese tax resident
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Applicants must:
- Fall within the scope of limited categories of high-level professional qualifications in tertiary, education, scientific research or entrepreneurship, which includes employment in startups, scaleups, or other criteria defined by applicable laws and regulations;
- Possess at least a Level 5 qualification under the European Qualifications Framework (EQF) and the International Standard Classification of Education (ISCED).
- Tax exemption on foreign professional and investment income (dividends, royalties, interest, capital gains) and property income
Frequently Asked Questions
Answers to common questions about the NHR 2.0 / IFICI program.
NHR 2.0 keeps some of the same benefits, including a 20% tax rate on qualifying Portuguese employment or self-employment income, and extends certain other benefits, such as a 0% rate on much foreign-sourced income.
However, the requirements to qualify are much more restrictive. In general, only certain qualified professionals, researchers, highly skilled workers and entrepreneurs can apply.
The NHR 2.0 regime applies for a period of 10 consecutive years. To continue benefiting from it, the individual must be considered tax resident in Portugal during the relevant year and must continue to earn income from one of the qualifying activities or professions.
An individual who does not benefit from the regime during one or more years of the 10-year period may return to the regime in any of the remaining years, provided they again become Portuguese tax resident and earn income from a relevant qualifying activity or profession.
Additional Services
About Us
The International Team is a specialized division of EDGE – International Lawyers
EDGE International Lawyers is an international law firm with extensive expertise in assisting international clients with their matters in Portugal, blending both traditional and innovative perspectives to provide 360º solutions.
The firm’s expertise covers a wide variety of areas, with particular emphasis on tax, residency and property investments, offering a complete range of legal solutions for all our clients. All our lawyers are fully conversant in several languages, and our objective is to establish a benchmark for quality of service and professionalism.
