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Portugal NHR 2025: Summary of the New NHR VS the Old NHR
By analysing all this information, we can conclude that the new tax benefit in Article 58-A of the Tax Benefits Statute is notably more exclusive. It particularly focuses on education, R&D, and entrepreneurship activities. However, taxpayers who fall within this new tax benefit can get an exemption from foreign income derived from white-listed countries.
This means that, even though this new benefit has a stricter range of applications, it can be more advantageous for the individuals who can benefit from it. This is given the fact that there is no need for the income to be subjected to taxation or liable to taxation in the country of source, unlike the NHR regime.
FINANCE, EDUCATION, SCIENCE AND INNOVATION AND ECONOMICS
Order no. 352/2024/1, of December 23rd
Following is the summary regarding 2025 NHR Portugal updates.
Summary: Regulates the tax incentive scheme for scientific research and innovation, provided for in article 58-A of the Tax Benefits Statute.
The high tax burden in Portugal has penalized work and is a disincentive to effort, merit and innovation, as well as being a significant obstacle to the competitiveness of Portuguese companies and to attracting international talent.
For this reason, the Programme of the XXIV Constitutional Government has chosen as one of its main objectives “to place Portugal at the forefront of innovation, digital transformation and the development of solutions that serve the country and open up new markets for our companies”, promoting a commitment to innovation, entrepreneurship and digitalization, creating conditions for a more innovative economy that boosts wealth creation and the creation of jobs with greater added value and better pay. To achieve these goals, it is crucial to strengthen skills, innovation and productivity, as well as encouraging scientific research and innovation.
In its article 263, Law 82/2023, of December 29, which approved the State Budget for 2024, created a tax incentive scheme for scientific research and innovation (IFICI), provided for in article 58-A of the Tax Benefits Statute (EBF), approved in the annex to Decree-Law 215/89, of July 1.o 215/89, of July 1 which aims to boost the growth of Portuguese companies and attract talent to the national economy, by taxing category A and B income from scientific research and innovation activities and qualified jobs at a
special rate of 20% in the IRS.
In this context, it is important to regulate the registration of beneficiaries in this scheme, as well as to approve the lists of highly qualified professions and industrial and service activities provided for in Article 58-A(1)(c) of the EBF.
Therefore, the Government, through the Minister of State and Finance, the Minister of Education, Science and Innovation and the Minister of Economy, pursuant to the provisions of paragraph 1(c) and paragraph 6 of article 58-A of the EBF, hereby orders the following:
Article 1 – Object and scope
This decree regulates the tax incentive scheme for scientific research and innovation (IFICI), provided for in article 58-A of the Statute of Tax Benefits (EBF), approved in annex to Decree-Law no. 215/89, of July 1, in its current wording, establishing:
a) The procedures for registering under this regime apply to taxable persons resident in Portugal who carry out activities covered by Article 58-A(1)(a) to (f) of the EBF;
b) Highly qualified professions and industrial and service activities, for the purposes of Article 58-A(1)(c) of the EBF.
Article 2 – Registration requests
1 – Taxpayers registered as residents in Portuguese territory must submit their applications for registration for the purposes of this regime by January 15th of the year following that in which they become residents in that territory.
2 – Applications must be submitted to the following entities:
a) Foundation for Science and Technology, I. P. (FCT), in the case of teaching activities in higher education and scientific research, including scientific employment in entities, structures and networks dedicated to the production, dissemination and transmission of knowledge, integrated into the national science and technology system, as well as the case of jobs and members of governing bodies in entities recognized as technology and innovation centers, within the scope of Decree-Law no. 126-B/2021, of 31 December;
b) Agência para o Investimento e Comércio Externo de Portugal, E. P. E. (AICEP, E. P. E.), in the case of qualified jobs and members of corporate bodies within the scope of contractual benefits for productive investment, under terms of chapter ii of the Investment Tax Code, approved in annex to Decree-Law no. 162/2014, of October 31, in its current wording;
c) Autoridade Tributária e Aduaneira (AT), in the case of highly qualified professions, listed in Annex I to this ordinance, of which it forms an integral part, which are:
i) Developed in companies with relevant applications, in the financial year in which they took office or in the previous five financial years, which benefit or have benefited from the investment support tax regime, under the terms of chapter iii of the Investment Tax Code; or
ii) Developed in industrial and service companies, whose main activity corresponds to one of the codes of the Portuguese Classification of Economic Activities (CAE) listed in Annex II to this decree, of which it is an integral part, and which export at least 50% of their turnover, in the financial year in which they began their duties or in any of the two previous financial years;
d) AICEP, E. P. E., or IAPMEI – Agência para a Competitividade e Inovação, I. P. (IAPMEI, I. P.), in the case of qualified jobs and members of governing bodies, in entities that carry out economic activities recognized by AICEP, E. P. E., or IAPMEI, I. P., as relevant to the economy. E., or by IAPMEI, I. P., as being relevant to the national economy, namely in terms of attracting productive investment and reducing regional differences;
e) Agência Nacional de Inovação, S. A., in the case of personnel research and development activities whose costs are eligible for the purposes of the tax incentive system for business research and development, under terms of Article 37(1)(b) of the Investment Tax Code;
f) Startup Portugal – Portuguese Association for the Promotion of Entrepreneurship, in the case of jobs and members of governing bodies in entities certified as startups, under the terms of Law no. 21/2023, of May 25, in its current wording.
3 – The taxable person must submit a new application for registration when there is a change in the entity with which the application for registration must be submitted or the company that must prove the requirements, in accordance with Article 4(2).
Article 3 – Checking requirements
1 – The application of the IFICI depends on verification of compliance:
a) The requirements relating to the activity carried out by taxable persons, which are the responsibility of the entities to which applications for registration are submitted.
b) The other legal requirements, which are the responsibility of the AT.
2 – Requirements relating to the activity carried out by taxable persons are those arising from paragraphs a) to f) of article 58-A(1) of the EBF, the legislation referred to therein and this ordinance, including the respective annexes.
Article 4 – Registration applications and notification of changes
1 – For the purposes of applying for registration and notifying changes, taxable persons must submit the following to the entities referred to in Article 2(2), except in the cases provided for in the following paragraph:
a) Copy of the individual employment contract, when the activity carried out is a job;
b) Up-to-date permanent commercial certificate, when the activity carried out is that of a member of a corporate body;
c) Copy of the grant contract, when the activity carried out is scientific research;
d) Proof of applicable academic qualifications;
e) The document referred to in Article 10(2), for the situations provided for therein;
f) Other documents that may be requested.
2 – It is the responsibility of the company in which the activity is carried out to prove the requirements relating to the activities provided for in Article 58-A(1)(c) of the EBF, by confirming, by March 15, in the respective reserved area of the Finance Portal (www.portaldasfinancas.gov.pt), the taxable person meets the requirements set out in subparagraphs i) or ii) of that subparagraph, as well as the exercise of the highly qualified profession by the same taxable person.
3 – For the purposes of the previous paragraph, the AT provides the elements to be confirmed by the end of February.
Article 5 – Communication of changes by taxable persons
Whenever the requirements to benefit this scheme are no longer met or there is a change in the details of the registration, the taxable person must inform the respective entity referred to in Article 2(2) by January 15 of the year following the year in which these facts occur, indicating, where applicable, the date of termination of the activity previously carried out.
Article 6 – Sending and accessing information
1 – The other entities referred to in Article 2(2) notify the AT by February 15th of each year:
a) Taxable persons’ applications for registration, submitted in accordance with Article 2, as well as changes communicated in accordance with Article 5;
b) Compliance with the requirements relating to the activity carried out by taxable persons.
2 – The communications referred to in the previous paragraph shall be made by electronic data transmission.
3 – The AT provides taxpayers with information on the status of their registration by March 31 of each year, and they can obtain proof of this status through their reserved area on the Tax Portal.
Article 7 – Highly qualified professions
1 – Annex I to this Ministerial Order, of which it forms an integral part, approves the list of highly qualified professions for the purposes of Article 58-A(1)(c) of the EBF.
2 – Workers involved in the professional activities mentioned in the previous paragraph must have at least:
a) Level 8 of the European Qualifications Framework, or level 8 of the International Standard Classification of Education (ISCED); or
b) Level 6 of the European Qualifications Framework, or level 6 of the International Standard Classification of Education (ISCED), and have three years’ duly proven professional experience.
3 – Also considered highly qualified professions for the purposes of Article 58-A(1)(c)(i) of the EBF are the positions of directors, managers and managing directors of companies with relevant applications at the beginning of their term of office or in the previous five financial years, which benefit or have benefited from the investment support tax regime, under the terms of Chapter III of the Investment Tax Code.
4 – In the case of regulated professions, the taxable person must also prove that they meet the requirements of the other applicable legislation.
5 – If there is any doubt as to the scope of the activities on the list, the codes in the Portuguese Classification of Professions annexed to Decision no. 967/2010 of the Statistical Council of May 5, 2010, published in the Diário da República, 2nd series, no. 106, of June 1, 2010, as well as the respective explanatory notes, should be taken into account.
Article 8 – Industrial and service companies
1 – Annex ii to this decree, of which it forms an integral part, approves the list of CAE codes for industrial and service companies, for the purposes of Article 58-A(1)(c)ii) of the EBF.
2 – If there is any doubt as to the scope of the activities listed in the list of CAE codes, the CAE revision 3, approved in the annex to Decree-Law 381/2007 of November 14, in its current wording, should be taken into account, as well as the respective explanatory notes.
Article 9 – Official model
Applications for registration of taxable persons under the terms of Article 2, as well as notification of changes under the terms of Article 5, shall be made using an official model approved by order of the member of the Government responsible for the area of finance.
Article 10 – Filing and proof obligations
1 – The entities referred to in paragraph 6 of article 58-A of the EBF to which the documents provided for under this ordinance are submitted, as well as the companies and other entities referred to in the following paragraph, shall be subject to the rules set out in chapter v and vi of Decree-Law no. 28/2019, of February 15, with the necessary adaptations.
2 – Companies and other entities in which the activity referred to in points b), c) is carried out, (d) and (e) of Article 58-A(1) of the EBF must provide the taxable person with a declaration attesting that compliance with the requirements applicable to the activity carried out.
3 – Taxpayers must have proof of their activity and the corresponding income, as well as the other legal requirements for entitlement that they claim in any of the years in which the regime applies, and present them whenever requested by the AT services, under the terms of article 128 of the IRS Code.
Article 11 – Entry into force and effect
This decree enters into force on the day following its publication and applies to taxable persons who become tax residents in Portuguese territory on or after January 1, 2024.
Article 12 – Transitional regime
1 – For the purposes of applying this regime to income earned in 2024:
a) Taxable persons who become resident in Portuguese territory in that year may submit the application for registration and communicate the changes provided for in articles 2 and 5, respectively, until March 15, 2025;
b) The entities referred to in Article 2(2) may make the notification provided for in Article 6(1) until April 15, 2025;
c) The AT provides taxable persons with information on the status of their registration, as provided for in Article 6(3), until April 30, 2025.
2 – The granting of applications for registration provided for in Article 2 puts an end to the registration procedures currently :
a) The non-habitual resident regime, if presented under Article 236(3) to (5 )of Law 82/2023 of December 29, as ;
b) The IFICI scheme, if presented under the terms of Article 58-A(9) of the EBF, without prejudice to the application of the provisions of 58-A(8).
The Minister of State and Finance, Joaquim Miranda Sarmento, on December 16, 2024. – The Minister of Education, Science and Innovation, Fernando Alexandre, on December 17, 2024. – The Minister for the Economy, Pedro Reis, on December 17, 2024.
ANNEX I – (referred to in Article 7(1))
The highly qualified professions for the purposes of the tax incentive for scientific research and innovation are those that fall under the following codes of the Portuguese Classification of Professions, annexed to Deliberation no. 967/2010, of the Higher Council of Statistics, of May 5, 2010, published in the Diário da República, 2nd series, no. 106, of June 1, 2010:
112 – CEO and executive manager of companies;
12 – Directors of administrative and commercial services;
13 – Directors of production and specialized services (except 1349);
21 – Physical sciences, mathematics, engineering and related technical specialists (except 216);
2163.1 – Industrial product or equipment designer;
221 – Doctors;
231 – University and professor;
25 – Information and communication technology (ICT) specialists.
ANNEX II – (referred to in Article 8(1))
Mining and quarrying – divisions 05 to 09;
Manufacturing – divisions 10 to 33;
Information and communication activities – divisions 58 to 63;
Research and development of physical and natural sciences – group 721; Higher
education – subclass 85420;
Human health activities – subclasses 86100 to 86904.
