Tax Incentives Scheme for Business Research and Development (Sifide II)

The Tax Incentives Scheme for Business Research and Development II, in force from 2013 to 2020, aims to support the activities of Research and Development related to the creation or improvement of a product, a process, a program or an equipment which present a substantial improvement and that do not result only from a simple use of the current state of existing techniques.

Within this incentive, the following is considered:
  • Research expenses - those expenses carried out by the IRC taxpayer aimed at the acquisition of new scientific or technical knowledge;
  • Development expenses - those expenses carried out by the IRC taxpayer while exploiting the results of research or other scientific or technical knowledge in order to discover or to obtain a substantial improvement of raw materials, products, services or manufacturing processes.


  • Beneficiaries
    Taxable persons subject to Corporate Income Tax (IRC) residing in Portugal, who perform, as their main activity or not, an agricultural, industrial, commercial or services activity, and non-residents with a stable establishment in the country, who have research and development (R&D) costs.
  • Eligible expenses
    1. Acquisitions of tangible fixed assets, with the exception of buildings and land, provided that they are created or acquired new and are directly linked to R&D activities;
    2. Expenses on staff directly involved in R&D duties, with a minimum qualification level of 4, considering the National Qualification Framework;
    3. Expenses related to executive and technical staff within the R&D institutions’ management structures;
    4. Operating costs, up to a maximum of 55% of expenses on staff directly involved in R&D duties, with a minimum qualification level of 4 from the National Qualification Framework, through pay, wages or salaries relating to that tax year;
    5. Expenses from tendering R&D activities with public bodies or beneficiaries of public utility status or entities whose expertise in the research and development field is recognised by joint order of the Minister of the Economy and the Minister for Innovation and the Minister for Science, Technology and Higher Education;
    6. Stakes in the share capital of R&D institutions and contributions to public or private investment funds to finance companies dedicated in particular to R&D;
    7. Costs related to registering and maintaining patents;
    8. Expenses related to the acquisition of patents predominantly for R&D activities (only SMEs);
    9. Expenditure on R&D audits;
    10. Expenses related to demonstration actions deriving from R&D supported projects.
    Expenses on staff, with a minimum qualification level of 8 from the National Qualification Framework, are considered at 120% of their amount.
  • Benefits
    This tax benefit allows to recover up to 82.5% of investment in R&D activities held in the tax periods of 1 January 2013 to 31 December 2020, particularly in the case of the portion that has not benefited from any straight financial contribution by the State.
    • Basic rate: 32.5% of costs incurred during the relevant period;
    • Increased rate: 50% on increased expenditure related to the simple mathematical average of the previous two tax years (up to a deduction limit of 1.5M€).
    SMEs which have not yet completed two years trading and have not had the benefit of the increased rate may apply a 15% increase to the basic rate (47.5%).
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