PATENT BOX REGIME
The Patent Box Regime provides a 50% exemption regarding corporate tax for companies that exploit patents, industrial designs and models protected by IP rights and registered after the date 01.01.2014 .
All Portuguese companies were subject to changes on the tax benefits, including those licensed to operate as IBC companies, due to the 2014 State Budget and the CIT Reform. Since the referring year, only 50% of the income arising from the temporary use of patents and industrial drawings or models have been relevant for the computation of the taxable income (if all of the requirements are met).
In case certain conditions are met, the combination of the CIT Code and special tax regime applicable to MIBC companies will result in the income derived from the temporary use of patents and industrial drawings or models being subject to an effective tax rate of 2,5%. This regime is highly competitive (comparing to other European countries' regimes) and, from a tax perspective, it may represent a significant saving, regarding patents and industrial designs or models which registered in Portugal.
NON HABITUAL RESIDENCY
With the goal to attract certain qualified individuals and investments to Portugal, a regime was established for non-habitual tax resident individuals.
This special tax regime is only applicable to individuals who have not been considered and taxed as tax residents in Portugal in any of the previous 5 years.
Employment and self-employment domestic income (Portuguese) are taxed at a flat rate of 20% if related to certain “high added-value” activities of scientific, artistic or technical nature. These activities are listed and published by the Portuguese Government.
There is also a tax exemption for foreign-sourced income established by this regime, such as rental income, self-employment income, interest, dividends as well as other investment income and pension income, under certain conditions.
The regime is applicable for a period of ten consecutive years.
The government has created a program called “Golden Visa Residence Program” with the intention of providing direct foreign investment into Portugal.
A special visa can be assigned to foreign investors in Portugal from non-EU countries, enabling them and their immediate family to work or study legally in the country and to travel within the Schengen area, provided that certain minimum amounts are invested. The requirement is that this investment must be maintained for a minimum period of 5 years. After the 5 years, the investor may immediately apply for a permanent residency permit.
There are 3 different manners in which this investment can be made:
- Capital transfer with a minimum value of 1 million Euro (e.g. bank deposit, acquisition of financial assets)
- The acquisition of real estate for a minimum amount of 500,000 Euro
- The creation of 10 jobs
New rules were introduced in July 2015 to extend the investment possibilities. This includes the following:
- Investment of a minimum of € 350,000 in a project relating to cultural or scientific research
- Purchase of a property plus rebuilding or renewals costs totalling a minimum of € 500,000 in certain conditions
- Investments in a property in a region with a low population density, reducing the minimum investment to € 400,000.