SIFIDE is the System of Tax Incentives in Research and Business Development, a tax instrument that aims to increase the competitiveness of companies by supporting their efforts in Research & Development (R&D) activities. SIFIDE allows for tax benefits on corporate income tax (IRC) of up to 82.5%. For companies that do not conduct R&D activities internally, they can benefit from this tax incentive through R&D Investment Funds.

SIFIDE is a valuable tool for companies that are looking to invest in R&D and innovation. It can help companies to reduce the cost of developing new products and services, and it can also make them more competitive in the global marketplace.

This benefit allows to recuperate for up to 82.5% of R&D investments, on the amount that has not been co-funded by the State through non-refundable funding:

• Base Rate – on the amount of total expenditure on R&D in the current year – 32.5%.
• Incremental Rate  – 50% of the increase in expenditure in relation to the average of the two previous financial years (maximum of €1,500,000.00).

Companies that do not conduct R&D activities internally can benefit from the SIFIDE tax incentive through R&D Investment Funds.

R&D Investment Funds are specialized funds that invest in R&D projects carried out by companies. These funds are typically managed by asset management companies or venture capital firms. To invest in an R&D Investment Fund, a company must first purchase shares in the fund. Once the company has invested in the fund, it can then claim a tax deduction for the amount of its investment. The tax deduction is equal to the percentage of the fund’s investment that is allocated to R&D projects in Portugal.