RFAI APPLIED TO TOURISM - Everything you need to know.

RFAI and Tourism: What is the relevance?

The tourism sector is one of the main driving forces of the Portuguese economy, contributing significantly to the national GDP and job creation. However, the competitiveness and sustainability of this sector require continuous and innovative investments. It is in this context that the Tax Regime for Investment Support (RFAI) stands out as one of the most relevant tax benefits for companies in the sector.

// What is RFAI?

RFAI is a fiscal policy instrument created to promote business investment and foster the creation and maintenance of jobs. This regime offers a series of tax advantages that can be decisive for the economic revitalisation of regions, especially in the tourism sector.

// RFAI Tax Benefits for the Tourism Sector

1. Total or Partial Tax Exemption

• IMI (Municipal Property Tax): Exemption for a period of up to 10 years after the purchase or construction of the properties.
• IMT (Municipal Property Transfer Tax) and Stamp Duty: Reduction or total exemption, depending on the recognition by the municipal assembly of the regional interest of the investment.

2.  Deductions from CIT Liability

• Deduction of 10% to 35% of the global amount of eligible investment, varying according to the region.
• In the North, Centre, Alentejo, and A.R. Azores regions, 30% of investments up to fifteen million euros are deductible, and 10% for amounts above that.
• In the A.R. Madeira, 35% of the global amount of eligible investment is deductible;
• In the Lisbon Metropolitan Area and Algarve, the deduction is 10% of investments.

// Eligible Expenses for the application of Tax Benefits

Tangible fixed assets, acquired in a new state, which include:
o Construction, acquisition, repair, and expansion of any buildings;
o Hotel equipment allocated to tourist operation;
o Furniture and comfort or decoration items;
o Wage costs resulting from the creation of jobs for personnel with educational qualifications of level 7 or level 8 of the National Qualifications Framework.

// Impact on Tourism

RFAI offers vital support for SMEs and Non-SMEs in the tourism sector, encouraging investments in infrastructure, services, and innovations that improve the visitor experience and increase companies' competitive capacity. By relieving the tax burden, RFAI allows companies to reinvest the saved resources in continuous improvements and business expansion.

// Requirements and Conditions

To benefit from these incentives, investments must promote job creation, reinforcing RFAI's commitment to sustainable economic development. Furthermore, companies must be involved in strategic activities such as tourism.
In 2022, 245 million euros were awarded under the RFAI, reflecting the confidence and importance of this regime for economic growth. For the tourism sector, these funds represent a significant opportunity to modernise facilities, diversify offerings, and attract more visitors, consolidating Portugal as a destination of excellence.

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