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Portugal is once again the country with the most generous R&D Tax Incentive

Portugal is once again the country with the most generous R&D Tax Incentive
Jornal de Negócios · 28 Feb 2020

At a time when the Tax Incentive for Research and Development (R&D), SIFIDE II, has an extended validity period until 2025, Ayming launches the updated version for 2020 of The Benchmark Survey. The Benchmark Survey is a comparative study carried out by Ayming, which addresses the tax incentives to R&D in 15 countries, including Portugal, analyzing them in a unique reference in terms of easy access to the incentive and generosity of it.

Existing in Portugal since 1997, SIFIDE (Tax Incentive System for Business R&D) saw its second generation - SIFIDE II - come into force in 2011, which means that we are facing a mechanism that has a high degree of maturity and that has certainly contributed to the reinforcement of business investment in Research and Development.

In 2018, SIFIDE started to include, in addition to the expenses incurred by companies in their R&D projects, the contributions they make towards funds in which they will invest if the companies the R&D suitability certification by the National Agency of Innovation. Thus, in addition to encouraging its own activities in the field of R&D, SIFIDE also started to play an important role in the capitalization of companies to which the practice of R&D activities has been recognized.

This tax incentive, which despite needing approval by the National Innovation Agency, can be used on a provisional basis even before approval, has enshrined almost 174 million euros in the proposal for the 2020 State Budget.

In The Benchmark Survey 2020, SIFIDE II stands out mainly in the "Generosity" axis compared to other devices, since combining its base rate with the incremental rate, it can reach up to 82.5% of eligible expenses. With a score of 40% in this indicator, the Ayming study concludes that, for the second consecutive year, Portugal has the most generous R&D tax incentive system, within the 15 countries that were considered for this purpose (Australia, Belgium, Canada, Czech Republic, France, Ireland, Italy, Poland, Portugal, Slovakia, South Africa, Spain, United Kingdom, USA).