Portugal's IFICI Tax Regime: 20% Flat Rate on Local Income, Near Exemption on Foreign Income for 10 Years
PublishedEditorial policy
Portugal's new IFICI tax regime replaces the former NHR, offering a 20% flat tax on Portuguese-sourced income and near exemption on foreign income for up to 10 years. Eligibility requires not having been a Portuguese tax resident for the past five years and fitting one of three specific professional profiles.
Key takeaways
- The IFICI regime offers a 20% flat tax on Portuguese-sourced income and significant exemptions on foreign income for 10 years, provided you have not been a Portuguese tax resident for the past five years.
- Eligibility is restricted to three profiles: highly qualified professionals (IT, engineering, science), scientists/researchers, or investors in innovative startups.
- Finanças approves applications; it is essential to confirm your profile matches the criteria before applying, with professional advice recommended.
Understanding Portugal's IFICI Tax Regime
The Incentivo Fiscal à Investigação Científica e Inovação (IFICI) is Portugal's new tax incentive regime, replacing the Non-Habitual Resident (NHR) scheme. Under IFICI, individuals who become Portuguese tax residents can benefit from a 20% flat tax rate on their Portuguese-sourced income and near-total exemption on most foreign-sourced income for a period of 10 years. The Portuguese tax authority, Finanças, approves applications based on specific eligibility criteria.
To qualify for the IFICI regime, applicants must not have been a tax resident in Portugal for the five years preceding their application. Additionally, they must fit into one of three professional profiles:
1. **Highly Qualified Professional:** This includes individuals in fields such as IT, engineering, and science.
2. **Scientist or Researcher:** Individuals engaged in scientific research or academic roles.
3. **Investor in Innovative Startups:** Those who invest in qualifying innovative startup companies.
The exact criteria for each profile are detailed in Portuguese legislation. Consulting with a tax advisor or Finanças directly can help clarify specific requirements.
Sources
Based on Emigro corridor reporting. Primary links below.
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