As the end of 2025 approaches, you may be wondering whether Portugal is still an attractive tax destination The RNH regime, once a flagship for expatriates, is giving way to IFICI, a new framework reserved for highly qualified professionals. Find out in this article about the key dates, the revised tax benefits and the transitional conditions to anticipate this crucial transition for your expatriation project or property investment in a country that is banking on innovation and international talent.
Tax transition in Portugal: from RNH to IFICI
Understanding the RNH tax regime and its evolution
The RNH regime, in place since 2009, offered foreign residents tax benefits for 10 years. It was designed to attract qualified professionals, retirees and investors. High value-added activities paid 20% tax, compared with up to 53% previously. Pensioners benefited from a total exemption or a reduced rate of 10% on their pensions. To find out more about the transition, read the tax alert published by EY Portugal here.
The RNH attracted many foreigners but increased the public deficit. It favoured pensioners to the detriment of working professionals. IFICI now targets experts in research, innovation and strategic sectors. It aims to stimulate the real economy rather than simply transferring tax residence. In this way, the Portuguese government hopes to attract talent that will actively contribute to the country’s development.
Key dates in the transition to IFICI
The RNH has not been accepting new applications since 2024. IFICI has applied to tax residents since 1 January 2024. The deadline for the transition process is 15 March 2025. The RNH regime, which had enabled many expatriates to settle in Portugal, is giving way to a more targeted framework.
| Date/range | Event/Scheme concerned | Actions required |
|---|---|---|
| End of 2023 | Closure of RNH to new applications | Definitive end to the acceptance of new RNH applications |
| 1st January 2024 | Retroactive entry into force of the IFICI | Application of new tax rules for residents since 2024 |
| 15 January (following year) | Submission of standard IFICI applications | Limit submission to 15 January following establishment of tax residence |
| 15th March 2025 | Transitional deadline for 2024 residents | Submit IFICI application before this date for tax residents in 2024 |
| 31st March 2025 | Last chance RNH for specific cases | Strict conditions to be met (contract, school, work before the end of 2023) |
| 15 February (each year) | IFICI applications sent to tax authorities | Government agencies must forward files to the TA |
| 15th April 2025 | Transitional deadline for transmission 2024 | Agencies have until this date for files of 2024 residents |
| 31 March (each year) | Official decision on IFICI status | TA informs taxpayers of acceptance or refusal of their application |
| 30th April 2025 | Transitional decision for 2024 residents | Deadline for confirmation of IFICI status |
| 10 consecutive years | Duration of IFICI tax benefits | Countdown from establishment of tax residence |
| 15 January (following year) | Obligation to notify changes | Declare any change in situation or loss of eligibility |
Current RNH beneficiaries retain their tax benefits for 10 years. People who become tax residents in 2024 can still apply for IFICI until 15 March 2025. Those who set up before March 2025 can no longer benefit from the RNH but have access to the IFICI if they meet the eligibility criteria. Highly qualified professionals in strategic areas for Portugal are given priority under this new framework.
Fundamental differences between RNH and IFICI
IFICI replaces RNH by targeting a more targeted audience. It is aimed at highly qualified professionals in scientific research and innovation. Unlike the RNH, its access is limited to strategic economic activities for Portugal. This change marks a shift towardseconomic attractiveness rather than simply fiscal attractiveness.
- More restrictive eligibility with IFICI: reserved for highly qualified professionals in key sectors such as scientific research and innovation, unlike the more accessible RNH
- Tax treatment of foreign pensions: progressive taxation up to 53% under IFICI versus reduced rate of 10% under RNH
- Similar tax exemptions for foreign income: 0% for dividends, interest, rent and capital gains on securities
- Activity requirement aligned with national objectives: compulsory validation of professional skills and activities under IFICI
Employment income of qualified professionals remains taxed at 20% under IFICI. Access is more restrictive, requiring activity in an eligible sector. Pensioners, formerly eligible for RNH, are now excluded from IFICI. Foreign property income generally remains exempt, except from tax havens (subject to 35%). Foreign dividends generally remain exempt under the new regime.
The fate of current RNH beneficiaries
Current RNH beneficiaries will retain their tax benefits for the full 10-year period. The scheme ended in 2024, but vested rights are protected. Tax residents before the end of 2024 could still apply for RNH until 31 March 2025 under certain conditions.
Former RNH beneficiaries are not eligible for the new IFICI scheme. People who became tax residents in 2024 had until 15 March 2025 to apply for IFICI. A fundamental condition of this new regime is that they must not have benefited from RNH. Foreign pensions, taxed at 10% under the old system, are now subject to the standard progressive rates.
IFICI: tax benefits and eligibility criteria
Tax benefits of the IFICI scheme
The IFICI scheme grants a flat-rate tax rate of 20% on eligible income from employment or self-employment. Foreign income is generally exempt fromtax in Portugal, with the exception of pensions, which are subject to the progressive tax scale.
Highly qualified professionals pay 20% on their Portuguese income instead of the progressive rate of up to 53%. Foreign dividends, interest, rent and capital gains on securities remain exempt. Foreign pensions are now taxed at standard rates, unlike the RNH, which applied a reduced rate of 10%.
Eligibility criteria for the IFICI regime
To qualify for IFICI, you must become a tax resident in Portugal without having been one for the previous five years. The professional activity must be highly qualified, in areas such as scientific research, innovation or technical professions. Former beneficiaries of the RNH or Regressar scheme are excluded.
Professionals must have a doctorate, master’s or bachelor’s degree and three years’ professional experience. Their activity must contribute to the country’s economic development, in areas such as research, innovation or exports. Employees of certified start-ups are also eligible under certain conditions.
IFICI’s preferred business sectors
IFICI gives priority to activities linked to scientific research and innovation. Portugal favours high-level professionals in technology centres, universities and exporting companies. Cutting-edge occupations in the physical sciences, engineering and digital technologies are particularly sought after.
- Professions in scientific research and innovation: university professors, researchers, specialists in the physical sciences and engineering
- Technological and digital experts: specialists in IT, communication technologies, software development, etc
- Professionals in exporting companies: managers in manufacturing and IT services with at least 50% exports
- Players in certified start-ups: managers and employees of young innovative companies meeting strict criteria (less than 10 years old, turnover < €50m)
- Managers in strategic entities: members of boards of directors in companies covered by the investment incentive scheme
Portugal is focusing onattracting international talent in scientific research and innovation. Highly qualified professionals in strategic fields will benefit from tax breaks for ten consecutive years. The country is aiming to boost its economic attractiveness rather than its fiscal attractiveness, by targeting profiles that will actively contribute to its development.
Application procedure for the IFICI scheme
Stages of the IFICI application
The application process begins with establishing tax residence in Portugal. Eligibility must be proven (non-resident for the last 5 years, highly qualified activity). The employer validates the eligibility of the position. The application is submitted online via the Finance Portal. The Portuguese Tax Authority analyses the application.
Important deadlines and dates
IFICI applications must be submitted by 15 January following the year in which the tax residence is established. Residents of 2024 have until 15 March 2025 to submit their applications. The transitional timetable sets strict deadlines that must be met to avoid losing the tax opportunity.
| Date of establishment of tax residence | Deadline for submission of IFICI application | Status of application |
|---|---|---|
| 2024 | 15th March 2025 | Transitional period for beneficiaries 2024 |
| 2025 | 15th January 2026 | Standard deadline for new applications |
| 2026 | 15th January 2027 | Standard deadline for new applications |
| 2027 | 15th January 2028 | Standard deadline for new applications |
| 2028 | 15th January 2029 | Standard deadline for new applications |
For tax residents in 2024, submit your IFICI application before 15 March 2025 via the Finance Portal. For an installation in 2025, the standard deadline is 15 January 2026. Subsequent years will follow the same timetable. Highly qualified professionals should anticipate the preparation of supporting documents.
Practical advice on how to prepare ahead
Start preparing your IFICI application as soon as you arrive in Portugal. Gather together your work contract, diplomas and certificate of eligibility. Seek the help of a local chartered accountant to avoid mistakes. Check your eligibility (previous non-resident, qualified activity) before submitting your application. French expatriates recommend that you start the application process as soon as you have obtained your NIF and tax residence.
Practical implications of the IFICI regime for expatriates
Impact on expatriation projects in Portugal
The IFICI regime redefines Portugal’s attractiveness to expatriates. It focuses on skilled talent, to the detriment of retirees and investors. Countries such as Italy, Croatia and Spain remain accessible to a wider range of profiles. Nevertheless, Portugal remains attractive thanks to its quality of life, climate and openness to the European Union.
The IFICI’s tax incentives partially offset the rising costs in the major cities. The property market in Lisbon and Porto remains tight, with prices set to rise by 7% in 2024. The cost of living remains lower than in France or Germany. Public healthcare costs 5 to 10 euros, while bilingual education costs around 500 euros a month.
New opportunities for qualified professionals
IFICI opens up opportunities for specialists in research, innovation and technology sectors. Careers in engineering, data sciences and biotechnology are actively recruiting. Growing start-ups are looking for talent in digital technology, artificial intelligence and renewable energies. Salaries start at 3,000 euros a month.
Portugal’s entrepreneurial ecosystem is being enriched by IFICI. Lisbon and Porto attract innovative companies with dynamic technology clusters. Local clusters are strengthening synergies between start-ups, major groups and universities. Professional networks deliberately welcome international talent, facilitating integration into the local economic fabric.
Challenges and limits to be anticipated
IFICI requirements limit access to a restricted circle. It can take several weeks to validate professional activity. Finding an eligible job can be difficult outside major cities. Access to housing is more difficult in urban areas, where rents have risen by 15% in three years.
Plan ahead for the administrative formalities with a local chartered accountant. Check your eligibility from the outset before investing in the move. Get in touch with professional networks such as Portugal Tech or Startup Lisboa to ease the integration process. Expatriates recommend preparing supporting documents several months before departure.
| Country | Specific regime | Tax rate | Duration | Conditions |
|---|---|---|---|---|
| Portugal | IFICI | 20% on eligible income | 10 years | Highly qualified activity in key sectors |
| Spain | Beckham Law | 24% on worldwide revenues | 6 years old | No previous residence in Spain |
| Italy | Tax regime for foreign workers | 30% on Italian income | 5 years renewable | Arrival in Italy more than 2 years ago |
| Croatia | Special regime | 12% on local income | 8 years | Employed or self-employed in technology sectors |
| Greece | Non-domiciled resident regime | 15% on foreign income | 7 years | Non-tax resident for the last 7 years |
Portugal is reinventing its tax regime with the IFICI, targeting highly qualified individuals in scientific research or innovation. Transitional conditions until March 2025 offer opportunities to be seized. If you’re planning a new start in a dynamic country, act fast: your expertise deserves an inspiring setting, and Lisbon or Porto is opening its doors to you with a lighter tax framework for years to come.
FAQ
Loss of IFICI eligibility: what are the consequences?
If you lose your eligibility for the IFICI scheme, the major consequence is that you will no longer benefit from the advantageous 20% rate on your professional income. You would then be subject to the general Portuguese tax system (IRS), whose progressive rates are much higher, which could make Portugal less attractive from a tax point of view for earned income than other European countries.
This loss can occur if you no longer meet the strict IFICI conditions, linked to the nature of your activity, your employer, or your career path. The administrative complexities and tight deadlines involved in registering can also make it difficult to obtain your initial entitlement, underlining the importance of preparing your application well and ensuring that you maintain your eligibility.
Family eligible for IFICI?
When it comes to your family’s eligibility for the IFICI scheme, you should be aware that the official documents do not mention any extension of benefits to your relatives. The scheme is specifically designed forhighly qualified individuals who meet the eligibility criteria linked to their professional activity and qualifications.
The tax benefits, such as the 20% rate on professional income in Portugal or the exemption on certain foreign income, are therefore strictly personal to the principal beneficiary. It is important to plan your expatriation bearing in mind that the rest of your household will be subject to the general Portuguese tax system.
Social security contributions under IFICI?
This is an important question, and the answer is clear: the IFICI scheme does not exempt you from social security contributions in Portugal. The scheme specifically targetsincome tax (IRS), offering a preferential rate, but does not affect social security contributions.
As an IFICI beneficiary, you will therefore be required to pay your social security contributions according to the general rules of the Portuguese system, in the same way as any other tax resident. This is a point not to be overlooked in your budget when you move here.
Minimum income for IFICI?
Unlike other schemes, IFICI does not set a minimum income threshold to qualify. Instead, the emphasis is on the nature of your business and your qualifications, which makes sense for a scheme that aims to attract talent and skills specific to Portugal.
To qualify, you need to be working in an activity that is considered to be highly qualified in sectors that are strategic for the country, such as scientific research and innovation, or in companies that export or are considered to be relevant to the national economy. Specific diplomas (doctorate, master’s degree or bachelor’s degree with experience) are generally required to validate this qualification.
Taxation of Portuguese property income?
If you are thinking of investing in property in Portugal, you should be aware that the income from it is of course taxed, but according to specific rules. At the time of purchase, you will have to payIMT (Municipal Transfer Tax) and stamp duty. Annually,IMI (local property tax) and sometimesAIMI (an additional tax on higher-value properties) will apply.
For rental income, rates vary depending on your residency status and the type of tenancy. As for capital gains on the sale of property, 50% of the gain is generally added to your other income and subject to the progressive tax scale, with possible exemptions if you reinvest in a new principal residence. The Franco-Portuguese tax treaty is there to avoid double taxation.
