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SIFIDE (Tax Incentives System for Research and Business Development) is a tax benefit granted to companies that invest in Research & Development (R&D) that allows the companies to recover up to to 82,5% of the value of investment in R&D of a given year, through the deduction of expenses from the IRC collection.
This tax instrument focuses on expenses arising from the normal activity of companies, such as staff costs and purchases of materials. As such, organisations do not need to make investments not foreseen in their normal business and/or define and structure projects in advance.
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SIFIDE is very broad in terms of potential beneficiaries: it is sufficient to be a company resident in Portuguese territory and carrying out an activity of an agricultural, industrial, commercial or service nature, or a non-resident company but with a permanent establishment in that territory.
The latter must fulfil the following cumulative conditions: taxable profits cannot be determined by indirect methods; it must not be liable to the State or Social Security for any contributions, taxes or levies and must have its payment duly ensured.
Finally, in both cases they must present Research & Development (R&D) expenditure. If these conditions are met, any company, whether service or not, is eligible under SIFIDE.
Yes. Any company can apply for SIFIDE, provided it fulfills the conditions mentioned above, simply by having R&D expenditure, which can happen through investment in funds.
As far as conducting R&D internally is concerned, this can happen formally - when there are dedicated departments and laboratories that continuously carry out R&D activities - but also informally.
Development teams, production teams, or even support teams can carry out R&D projects, either as part of a strategy or on a one-off basis to solve certain problems.
The key point in separating an R&D project from an engineering project or an industrial activity is the existence of an appreciable element of novelty and the resolution of a scientific and/or technological uncertainty.
This can be very easy to spot - a product that dictates a significant advance over the state of the art, but also often in problem solving, whether in what is your core business, your products, development, or production processes, or in less obvious areas and/or processes.
No. First, as an R&D project there is an associated risk, an uncertainty that needs to be resolved and, at the outset, it is not known how. Therefore, the project may not achieve its objectives. That is, to be successfully completed.
On the other hand, as already mentioned, projects may not focus on products or services that reach the market. As we have already seen, these may be internal to the companies. By the way, it should also be noted that although SIFIDE is annual, projects may last longer than one year.
In these cases, the overall objectives of the project are presented first, and the project as a whole is defended. Then the work carried out in the year in question is discussed.
The application is assessed by the National Innovation Agency (ANI) which - in case of approval - issues a declaration certifying the realisation of R&D activities by the company and the tax credit to which the company is entitled.
This declaration, together with the application form and its attachments which include, for example, an R&D balance sheet supporting the costs submitted, constitute the tax file.
As far as the benefit is concerned, companies then enter this value in Model 22, deducting the tax benefit from the tax payable.
Some companies value the benefits of SIFIDE so much that they fear losing them when applying for other R&D support mechanisms.
But the truth is that they do not lose them. SIFIDE can include financed projects, internal projects of the company - not subject to incentive -, or projects of both types, and there is no maximum number of projects per SIFIDE. In the case of funded projects, the tax benefit only applies to the percentage of investment that was not incentivised.
In cases where projects are not incentivised, the conditions remain the same.
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