New Tax Regime to Attract Highly Skilled Workers Comes Into Force
People who obtained residence in Portugal in 2024 will be able to register for the tax regime until March 15, 2025, according to the decree published this week.
What?
The new tax regime, IFICI+ (Incentive for Scientific Research, Innovation, and Human Capital), designed to attract highly qualified professionals to the country, has come into force.
This program, which replaces the previous Non-Habitual Resident (NHR) regime, was officially detailed in a decree published on December 23 in the Diário da República.
Who Qualifies?
The IFICI+ regime targets eight categories of highly skilled professions, including:
Chief executives and general managers.
Administrative and commercial directors.
Directors of production and specialized services.
Specialists in physical sciences, mathematics, engineering, and related fields.
Industrial or equipment product designers.
Medical professionals.
University and higher education professors.
Information and communication technology (ICT) specialists.
Eligible individuals under IFICI+ will benefit from a reduced personal income tax (IRS) rate of 20% on both dependent and independent work (categories A and B). This aligns with the government’s goal to attract talent in key sectors, particularly scientific research, and innovation.
Workers seeking to benefit from the regime must hold a doctorate or a bachelor’s degree, provided they have at least three years of verifiable professional experience in the latter case. Professions related to the performing arts, hospitality, journalism, agriculture, fishing, and hunting have been removed from the list of high-value professions.
Additionally, the decree stipulates that to qualify for the regime, these professions must be within the following business sectors, which must export at least 50% of their revenue:
Extractive industries
Manufacturing industries
Information and communication activities
Research and development in physical and natural sciences
Higher education
Human health activities
Companies benefiting from the RFAI (Fiscal Support Regime for Investment) are exempt from the export requirement.
Applicants must register for the regime by January 15 of the year following the one in which they become Portuguese residents, as stated in the decree. However, for the initial year of the regime, covering income earned in 2024, a transitional provision allows applications to be submitted until March 15, 2025. The tax benefit lasts for ten years from the year the worker establishes fiscal residency in Portugal.
Online Platform for Applications
With the publication of the decree, the Finance Portal will include an electronic platform for submitting IFICI+ applications, according to a government source. Currently, the process involves more bureaucracy, requiring taxpayers to request access via the e-Balcão platform or visit a tax office in person.
The government has not disclosed how many applications have been submitted under the transitional regime covering 20 high-value professions but anticipates the number to be limited. For these cases, each application will be assessed individually.
For example, a worker who has applied for the IFICI and is eligible under the transitional regime but may no longer qualify under the new rules will still have access to the incentive, explained the government led by LuÃs Montenegro.
Different Entities for Specific Professions
Not all applications are directed to the Tax Authority (AT). For university teaching and scientific research activities, applications are submitted to the Foundation for Science and Technology (FCT). Applications for qualified job roles and board members under contractual investment benefits are sent to AICEP (Portugal’s Trade and Investment Agency). For research and development activities eligible for tax incentives, the National Innovation Agency handles the requests. Applications for startup-certified job roles and board members are directed to Startup Portugal.
These entities must report applications to the AT by April 15 of the following year. The Tax Authority will then inform applicants of their registration status by April 30.
The decree, signed by Finance Minister Joaquim Miranda Sarmento, Education Minister Fernando Alexandre, and Economy Minister Pedro Reis, takes effect on January 1, 2024.
Key Deadlines and Transitional Arrangements
For 2024, the first year of the program, new residents can apply for the regime until March 15, 2025. Starting in subsequent years, the application deadline will be January 15 for those who became residents in the previous calendar year.
The program will apply retroactively to cover those who established residency in Portugal in 2024, ensuring that early adopters can benefit from the new framework.
Restrictions and Exclusions
Certain groups are excluded from IFICI+, including:
Individuals who have resided in Portugal within the past five years.
Current or former beneficiaries of the Non-Habitual Resident or Returnee status (which targets former Portuguese residents returning to the country).
Government’s Vision
Economy Minister Pedro Reis, speaking before the parliamentary committee on Economy, Public Works, and Housing, emphasized that the regime aims to position Portugal as a hub for innovation and attract global talent.
By offering competitive tax advantages, the government hopes to address skills shortages in critical industries and bolster the national economy.
The new regime underscores Portugal’s commitment to fostering a knowledge-driven economy, with policies tailored to attract and retain top-tier professionals.