IFICI 2026 - the complete guide (NHR replacement)

The Non-Habitual Resident (NHR) regime closed to new applicants at the end of 2023, with a transitional window for 2024 completions. Its replacement - IFICI, Incentivo Fiscal à Investigação Científica e Inovação - has been active since January 2025. If you are becoming a Portuguese tax resident in 2026 or later, IFICI is the regime that might apply to you, not NHR.

What is IFICI?

IFICI is a 10-year tax incentive targeting highly qualified professionals in strategic sectors: scientific research, technology, healthcare, green energy, and companies exporting more than 50% of their revenue. It replaces the broader NHR regime with tighter eligibility but similar headline benefit (20% flat rate on qualifying Portuguese income).

Eligibility criteria

All of the following must be met:

Headline benefits

• 20% flat IRS rate on Portuguese-sourced employment income (Category A) and professional income (Category B) for 10 consecutive years.
• Possible exemptions on foreign dividends, interest, royalties and capital gains (subject to double-taxation treaty analysis case by case).
• Benefit period runs 10 tax years from the year Portuguese tax residence is established.

IFICI vs NHR - what changed

How to apply

1. Confirm Portuguese tax residency (Portal das Finanças - get a NIF + update address if needed).
2. Gather evidence: diplomas (EQF validation), employment contract specifying qualifying activity, employer certification where applicable.
3. Submit IFICI application via Portal das Finanças during the year residency is established (or within the following tax year).
4. AT review typically 4–8 weeks. If denied, accountants with IFICI experience can help with appeals.

The application is formally simple but substantively complex. The highest-frequency rejection reason is failing to prove the qualifying activity (EQF documentation missing or ambiguous employer contract).

FAQ

Does IFICI work for remote workers employed by foreign companies?

It depends on whether the income qualifies as PT-sourced for IRS purposes. If you are performing work physically in Portugal for a foreign employer, the income is typically PT-sourced (Category A) and can fall within IFICI - subject to activity category + EQF requirements.

Are foreign pensions fully taxed?

Yes. Unlike the old NHR 10% flat, under IFICI foreign pensions are taxed at the standard progressive IRS rates (after applying any bilateral double-taxation treaty). This is the biggest loss vs old NHR for retirees.

Can I combine IFICI with the Madeira 30% regional differential?

IFICI applies a flat 20% rate to qualifying income; the regional differential applies to standard progressive IRS. They do not stack - IFICI replaces the progressive calculation for qualifying income. For non-qualifying income (e.g. rental income), the Madeira differential applies.

What if I already have NHR from 2023?

You keep the NHR regime until the end of the original 10-year window. See the NHR Transitional guide →

Editorial guide. Not legal or tax advice. Verify with an OCC-certified accountant + immigration lawyer before applying.