IFICI (or “NHR 2.0”)

With the State Budget Law for 2024, the legislator introduced the new Tax Incentive for Scientific Research and Innovation (IFICI), now enshrined in Article 58-A of the Tax Benefits Statute (EBF). This represents an innovation for companies and highly qualified professionals who, previously, would typically resort to the Non-Habitual Residence (NHR) regime as a tool to attract and retain highly skilled international talent.

Similarly to the former regime, the new framework is intended for individuals who become tax residents in Portuguese territory, who have not been tax domiciled in Portugal in any of the previous five years, and who carry out one of the activities expressly provided for in the legislation. Likewise, it applies to the Personal Income Tax (PIT) of the relevant taxpayers, by taxing Portuguese-source income derived from employment income (Category A) and self-employment income (Category B) at a flat rate of 20% (in respect of the qualifying activities). Conversely, the regime excludes the right to tax credits and deductions, as well as the application of the family quotient.

The regime may only be used once per taxpayer, who must not be beneficiaries of the Tax Benefit for the Youth (“IRS Jovem”) regime, nor have previously benefited from NHR status or from the “Former Residents” regime.

Among others, the regime may be applied to activities related to higher education teaching and advanced research, productive investment, members of corporate governing bodies, positions within start-ups, and highly qualified professions.

Our team is fully prepared to assist both employers and employees in the assessment, qualification and registration under this regime, ensuring that all parties are properly advised as to the potential risks involved and the appropriate conduct to be adopted, from a tax optimisation perspective.