TAX Incentives

The State Budget for 2024 has repealed the Non-Habitual Residents (NHR) regime and introduced a new framework, called the Tax Incentive for Scientific Research and Innovation (NHR 2.0). This change reflects a new approach to attracting highly skilled professionals and fostering research and innovation in Portugal, aiming to boost competitiveness and reduce regional disparities.

According to the government decree that came into effect on December 24, 2024, the eligibility criteria for this regime are as follows:
• Taxpayers must not have resided in Portugal during the last five years.
• Taxpayers must establish tax residency in Portugal and engage in one of the following activities:

a) Higher education faculty and scientific researchers, including positions in scientific institutions, networks, and structures within the national scientific and technological system, as well as employees and board members of entities recognized as innovation or technology centers.

b) Qualified professionals and board members of entities benefiting from contractual incentives for productive investment (as outlined in Portugal’s Investment Tax Code).

c) Highly skilled professionals in companies that have made significant investments during the year of establishment or in the previous five years and that benefit from the Tax Incentive Regime for Investment (RFAI), industrial companies, and service providers exporting at least 50% of their turnover in the year of business creation or the two preceding years. This includes extractive industries, manufacturing, communication and information activities, R&D in physical and natural sciences, higher education, and healthcare services.

d) Other qualified professionals and board members of entities recognized by AICEP or IAPMEI as organizations conducting activities relevant to the national economy, including attracting productive investment and reducing regional disparities.

e) Workers involved in R&D projects whose expenses are eligible under the fiscal incentive system for research and development (SIFIDE), as specified in the Investment Tax Code.

f) Employees and board members of certified start-ups and scale-ups.

g) Jobs or other activities in the autonomous regions of the Azores and Madeira, with details to be defined by regional decree.

The new regulation also specifies the list of highly skilled professions, which has been revised from the previous regime. The eligible professions now include:
• General managers and executives;
• Administrative and commercial service managers;
• Production and specialized services managers;
• Specialists in physical sciences, mathematics, engineering, and related fields;
• Product or industrial equipment designers;
• Medical doctors;
• University and higher education professors;
• Information and Communication Technology (ICT) specialists.

Taxpayers in these professional categories must provide proof of qualifications, demonstrating either:
• Level 8 of the European Qualifications Framework (or its equivalent in the International Standard Classification of Education), corresponding to a doctoral degree; or
• Level 6 of the European Qualifications Framework (or its equivalent in the International Standard Classification of Education), corresponding to a bachelor’s degree, along with at least three years of proven professional experience.

Taxpayers must submit their application to the relevant authorities by January 15 of the following year. These authorities will forward the requests to the Tax Authority by February 15, and the Tax Authority must issue a decision by March 31 of the same year.

This regime does not apply to individuals who have already benefited from the Non-Habitual Residents (NHR) regime or opted for taxation under the Ex-Residents regime (Reintegration Program).

You should consult your legal advisor for more information.