Tax credit · Research and development
SIFIDE II: Portugal's R&D tax credit
SIFIDE II is Portugal's tax credit for business research and development. A company deducts from its corporate tax 32.5% of its R&D costs for the year, plus 50% of the increase over the average of the two previous years, with that second part capped at EUR 1.5 million. What cannot be used in the year carries forward for 12 years.
It is a tax credit, not a grant: nothing is paid into your account, your tax bill goes down. Unlike RFAI, it needs an application. The company submits its R&D projects and costs to ANI, the national innovation agency, by the end of May of the following year, and ANI certifies what counts as R&D.
Figures checked against the official sources on 18 September 2026. We never promise approvals.
- What it is
- A credit against corporate income tax (IRC) for research and development costs
- Nature
- Tax credit. Not a grant, not a loan
- Base rate
- 32.5% of the year's eligible R&D costs
- Incremental rate
- 50% of the increase over the two-year average, capped at EUR 1.5 million
- Young SMEs
- A 15% uplift on the base rate for SMEs that have not completed two financial years
- Carry forward
- 12 tax periods
- Application
- To ANI, by the end of May of the following year
- In force
- For tax periods starting on or before 31 December 2026
What SIFIDE II is, and who can use it
SIFIDE II (Sistema de Incentivos Fiscais à Investigação e Desenvolvimento Empresarial) is part of the Portuguese Investment Tax Code. It is open to companies resident in Portugal whose main activity is agricultural, industrial, commercial or services, and to non-resident companies with a permanent establishment here. Size does not matter and neither does ownership.
What matters is that the work is real research and development in the sense the evaluators use: it seeks something new, the outcome is technically uncertain, and it is carried out systematically and documented. A software company building a new algorithm, a factory developing a new material or process, an agri-food firm running trials on a new product can all qualify. Routine engineering, customising existing software for a client or adopting technology that already exists does not.
The rates
| Element | Rule |
|---|---|
| Base rate | 32.5% of the eligible R&D costs of the tax period |
| Incremental rate | 50% of the increase in R&D costs over the simple average of the two previous years, up to EUR 1.5 million |
| SMEs that have not completed two financial years | A 15% uplift on the base rate, if they did not use the incremental rate |
| Carry forward | Up to the twelfth following tax period |
| Costs already covered by a grant | Excluded. Only the part not funded by a non-repayable public grant counts |
Taken together, the base and incremental rates can reach 82.5% of the additional R&D spending of a company that is growing its research effort. For steady spending, plan with the base rate.
Which costs are eligible
- R&D staff. The salaries of the people who work directly on research and development. For most companies this is the bulk of the claim.
- Contracted R&D. Research bought from universities, research centres and other bodies recognised for this purpose by ANI.
- Equipment. Fixed assets used in R&D, in proportion to that use. Buildings and land are excluded.
- Operating costs, within a ceiling tied to the R&D staff costs.
- Patents and R&D audits. Registering and maintaining patents, and the cost of auditing the R&D.
Until 2025, a company could also earn SIFIDE credits by buying units in certain investment funds. Decree-Law 170/2026 of 21 August 2026 closed that route. Taking a stake in a recognised research and development institution still counts.
How to claim it
- Identify the R&D projects. Confirm that the work meets the definition: novelty, technical uncertainty, systematic work.
- Work out the eligible costs of the year, project by project, with timesheets or another record that ties people and assets to R&D.
- Prepare the technical and financial file that describes each project and justifies the costs.
- Apply to ANI by the end of May of the following year. The application covers the costs of the previous financial year and is written in Portuguese.
- Deduct the certified amount from corporate tax, and carry forward what does not fit.
The habit that decides a SIFIDE claim is kept during the year, not at the deadline: recording who worked on which project and what was tried, including what failed. Failed experiments are good evidence of technical uncertainty.
A worked example
A software company has EUR 150,000 of eligible R&D costs this year: its development team, some equipment and research contracted to a university. In the two previous years it averaged EUR 100,000.
The base credit is 32.5% of EUR 150,000, which is EUR 48,750. The increase over the two-year average is EUR 50,000, and 50% of that adds EUR 25,000. The total credit is EUR 73,750 against corporate tax. If the tax due for the year is lower, the rest carries forward.
Is SIFIDE II still in force?
Yes. SIFIDE II has an end date written into the law and has been extended several times. The latest extension, by Decree-Law 170/2026 of 21 August 2026, covers R&D costs in tax periods that start on or before 31 December 2026.
Whether it continues for 2027 depends on a new law. If your investment case relies on SIFIDE for several years, treat the years after 2026 as likely but not guaranteed.
Frequently asked questions
Can a foreign-owned company claim SIFIDE II?
Yes. The credit is for companies resident in Portugal and for non-resident companies with a permanent establishment here. A Portuguese subsidiary that carries out and pays for R&D in Portugal can claim. When the work is done under contract for the parent company, who bears the cost and the risk matters, and it has to be checked case by case.
We are a startup with no profit. Is it worth applying?
Usually yes. The credit certified for a loss-making year is not lost: it carries forward for 12 tax periods and is used when the company starts paying corporate tax. SMEs that have not completed two financial years also get a 15% uplift on the base rate. If you do not expect to pay corporate tax in that window, a grant for R&D is worth more to you.
Can SIFIDE II be combined with a Portugal 2030 R&D grant?
Yes, but not on the same euro. R&D costs already covered by a non-repayable grant are excluded from SIFIDE. The part of the project that the grant does not fund can go into the SIFIDE claim.
Can it be combined with RFAI?
Yes. They reward different things: SIFIDE II covers research and development costs, RFAI covers investment in productive assets.
How long does ANI take to decide?
Several months. How the credit is reflected in the tax return while the decision is pending is a question for your certified accountant. A well documented application is the best protection against a certified amount lower than the one you expected.
Official sources
The official texts are in Portuguese. The figures on this page were checked against them.
- Investment Tax Code (CFI), article 38 (SIFIDE II), as amended by Decree-Law 170/2026 (checked 18 September 2026)
- gov.pt: submitting a SIFIDE application (checked 18 September 2026)
- ANI, the national innovation agency: SIFIDE
- Decree-Law 170/2026 of 21 August 2026 (Diário da República)
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