SIFIDE R&D tax credits are a corporate income tax incentive that allows companies to recover a significant portion of their Research and Development (R&D) expenses.
Businesses can recover between 32.5% and 82.5% of their annual R&D investment. Because this tax incentive covers expenses arising from a company’s normal business activities, such as personnel costs and material purchases, companies are not required to make additional or extraordinary investments, nor to define or structure projects in advance.
Programme details
Application deadline: Continuous
Beneficiary entities: Large companies, SMEs, micro-enterprises and startups
Type of benefit: Corporate income tax credit (IRC)
Benefit: Tax credit of 32.5% to 82.5% of R&D expenses
Minimum investment: Not applicable
Geographic scope: Mainland Portugal, Madeira and the Azores
- Deadline: May 30th of the following year
What are SIFIDE R&D tax credits
SIFIDE II is an IRC tax credit that allows companies to recover part of their Research and Development (R&D) expenses.
The incentive applies to R&D expenditure incurred within the scope of the company’s normal activity and does not require prior project approval.
Further details on the SIFIDE framework are available on the official programme page.
How the tax credit works
SIFIDE II is structured around two components:
Base rate: 32.5% of R&D expenditure incurred during the period
Incremental rate: 50% of the increase in expenditure over the period, compared to the average of the previous two years, up to a maximum of €1.5 million
In practice, companies can recover up to 82.5% of their investment in R&D.
For companies with less than two financial years of experience that have not benefited from the incremental rate, there is a 15% increase on the base rate, resulting in a base rate of 47.5%.
If it is not possible to deduct the entire benefit due to insufficient tax collection, the surplus becomes a tax credit and can be deducted for up to 12 years.
Eligible R&D expenses
Eligible expenses under SIFIDE include:
Research
Expenditure to acquire new scientific or technical knowledge.
Development
Expenditure incurred by exploiting the results of research or other scientific or technical knowledge with a view to discovering or substantially improving raw materials, products, services or manufacturing processes.
Other eligible expenses
Costs of personnel involved in R&D activities (minimum NQF level 4)
Operating costs, up to 55% of staff costs
Acquisition of tangible assets, provided they are new or created for R&D activities (excluding buildings and land)
Hiring R&D services from public entities, beneficiaries of public utility status or entities recognised by ANI
Participation of managers in R&D institutions
Expenditure related to the participation of managers and staff in the management of R&D institutions
Participation in the capital of R&D institutions and contributions to public or private investment funds aimed at financing companies mainly dedicated to R&D
Registration, purchase and maintenance of patents
Acquisition of patents for R&D purposes (SMEs only)
R&D-related audits
Demonstration actions of funded R&D projects
Who can benefit from SIFIDE
SIFIDE applies to a wide range of companies, including large enterprises, SMEs, micro-enterprises and startups, provided they incur eligible R&D expenses.
The incentive is particularly relevant for companies that carry out research or development activities as part of their regular business operations.
Understanding the rules and eligibility criteria of each incentive is essential to assess its relevance and potential impact within a company’s broader investment and tax strategy.
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