SIFIDE (Tax Incentive System for Corporate Research and Development) is a tax incentive available to companies that carry out Research and Development (R&D) activities.

Through this scheme, eligible companies can recover part of their investment in R&D while encouraging future innovation and research initiatives. Below, we explain how the programme works, who is eligible, and how to apply.

SIFIDE: Tax Incentives for Research and Development

As mentioned above, SIFIDE is designed to support companies engaged in Research and Development (R&D) activities.

But what exactly qualifies as R&D? The scheme recognizes three main categories of eligible activities:

Basic Research

Basic research consists of experimental or theoretical work carried out primarily to acquire new knowledge about the underlying principles of observable phenomena and facts, without any immediate commercial or practical application in mind.

Applied Research

Applied research follows the same scientific principles as basic research but is directed towards achieving a specific practical objective or solving a particular problem.

Experimental Development

Experimental development involves work based on existing research findings or practical experience.

Its purpose is to create new materials, products, or devices, develop new processes, systems, or services, or significantly improve existing ones.

Who Can Benefit from SIFIDE?

Companies subject to Portuguese Corporate Income Tax (IRC) whose main activity falls within the agricultural, industrial, commercial, or services sectors may apply for SIFIDE.

To qualify, applicants must also meet both of the following conditions:

• Their taxable profit must not be determined using indirect assessment methods;
• They must have no outstanding debts to the Portuguese Tax and Customs Authority (Autoridade Tributária) or to the Portuguese Social Security authorities (Segurança Social).

What Tax Benefits Does SIFIDE Offer?

In simple terms, SIFIDE allows eligible companies to reduce their Corporate Income Tax (IRC) by deducting a percentage of qualifying R&D expenditure.

Eligible expenses must not have been financed through non-repayable State grants and must relate to tax periods beginning between 1 January 2014 and 31 December 2025.

The tax credit is calculated as follows:

• Base rate: 32.5% of qualifying R&D expenditure incurred during the relevant tax period;
• Incremental rate: 50% of the increase in qualifying expenditure compared with the average expenditure of the previous two tax years, up to a maximum of €1,500,000.

A 15% increase to the base rate is also available for SMEs that have been operating for less than two years and have not benefited from the incremental rate.

Where the tax credit cannot be fully utilised in the year the expenditure is incurred due to insufficient Corporate Income Tax liability, the unused amount may be carried forward and deducted over the following eight tax years.

How Can Companies Apply?

Companies wishing to apply for SIFIDE may submit their applications up to the end of the fifth month of the year following the relevant financial year.

Applications relating to earlier tax years submitted after this deadline will not be accepted.

Companies benefiting from the SIFIDE scheme are required to provide the National Innovation Agency (Agência Nacional de Inovação, S.A. – ANI) with all requested information in a timely manner.

Beneficiaries must also cooperate with any technological audits requested by ANI in order to verify compliance with the conditions under which the tax incentive was granted.

In addition, companies must submit an annual report to ANI outlining the results achieved through the Research and Development activities supported by the tax incentive.

This report must be submitted within two months of the end of each financial year and annually for the five years following the approval of the incentive.

What Changed in SIFIDE in 2026?

The SIFIDE II scheme was extended to cover the 2026 tax year. One of the main changes introduced was the removal of the possibility of accessing the incentive through investment funds, while maintaining the 32.5% base deduction rate for eligible Research and Development expenditure.

For further information, please visit the official SIFIDE website, where you can find comprehensive guidance on the programme.