Corporate Income Tax (IRC) credit/deduction of eligible R&D expenses on the part that has not benefited from a non-refundable State financial contribution, incurred during the tax years starting between the 1st of January 2014, and the 31st of December 2025, on a double percentage:
In the case of Small and Medium-Sized Enterprises (SMEs) that have been in business for less than two years and have not benefited from the Incremental Rate, an increase of 15% on the Base Rate applies (47.5%).
- Base Rate: on the amount of total expenditure in research and development in the year concerned - 32.5%;
- Incremental Rate: 50% of the increase in expenditure in relation to the average of the two previous years (maximum of €1,500,000.00);
In the case of Small and Medium-Sized Enterprises (SMEs) that have been in business for less than two years and have not benefited from the Incremental Rate, an increase of 15% on the Base Rate applies (47.5%).
Requirements
- IRC taxpayers residents in Portugal whose main activity is of an agricultural, industrial, commercial or services nature; it also applies to non-residents with a permanent establishment in Portugal who have R&D expenses and whose suitability in terms of R&D is recognised by the National Agency for Innovation (ANI);
- Having R&D expenses not subsidized as non-refundable grant;
- The taxable profit must not be determined by indirect methods and the tax and social security situation must be in good order.
Relevant applications:
- Acquisitions of tangible fixed assets, with the exception of buildings and land, provided they are newly built or acquired and are directly allocated to R&D activities;
- Expenditure on staff, with a minimum academic qualification of level 4 of the National Qualifications Framework (NQF), directly involved in R&D;
- Expenses related with executive and technical staff within the R&D institutions’ management structures;
- Operating expenses, up to a maximum of 55% of the expenses with staff with a minimum academic qualification of level 4 of the NQF, directly involved in R&D, accounted for as remuneration, wages or salaries, for the tax year;
- Expenses with contracting R&D with public entities or entities with a public utility status ("utilidade pública”) or entities whose suitability in R&D is recognised by the ANI;
- Participation in the share capital of R&D institutions and contributions to public or private investment funds, aimed at financing companies dedicated mainly to research and development, including the financing of the enhancement of their results, whose suitability in R&D is recognised by the ANI.
- Costs related to registering and maintaining patents;
- Expenditure on the acquisition of patents that are predominantly for R&D activities (only applicable to SMEs);
- Expenditure on R&D audits;
- Expenses with the exhibit of R&D projects that have been previously communicated to the ANI;
- R&D expenses related to eco-friendly product development are accounted at 110% of the total amount;
- Expenses on staff, with a minimum qualification level of 8 from the National Qualification Framework, are considered at 120% of their amount.
How to obtain
Interested entities should submit their applications by the end of the 5th month of the year following the tax year to ANI.