Solange Dias Nóbrega analyses the proposed end of the R&D tax benefit for investment funds

Solange Dias Nóbrega, managing associate in the tax practice at Morais Leitão, signs the article “Portuguese tax benefits for R&D funds investment: is the end rapidly approaching?”, in which she critically analyses the Portuguese government’s plan to phase out the tax benefit known as indirect SIFIDE, which grants a corporate tax credit for investments in R&D funds. The proposal was included in the 2026 State Budget Proposal, presented on 9 October.

The article raises a key question: could this decision compromise innovation and entrepreneurship in Portugal?

The government’s proposal foresees the progressive elimination of the benefit, while allowing that any tax credit not deducted in 2025 may still be carried forward to subsequent fiscal years. However, as the author notes, this announcement has sparked immediate reactions, being perceived as an abrupt measure, with potentially underestimated impacts.

Currently, this incentive grants a 32.5% corporate tax credit on investments in R&D fund units. Despite increasing reporting and control requirements over the years, the regime has proven to be an effective tool for channelling private investment into innovative projects and strengthening the entrepreneurial ecosystem.

Solange Dias Nóbrega argues that the assessment of this tax expenditure must go beyond a direct fiscal analysis, and take into account broader effects on the economy. A recent study by the Nova Economics for Policy Knowledge Center concluded that the economic benefits outweigh the fiscal cost, particularly in terms of job creation, generated profits, and support for early-stage startups with high capital consumption.

The article also highlights the risk of weakening Portugal’s innovation ecosystem, especially at a time when strategic sectors such as biotech, aerospace and defence are starting to gain traction through specialised investment vehicles. This is compounded by the scheduled end of the Capitalisation and Resilience Fund and the diminishing relevance of other instruments, such as golden visas.

Finally, the author poses a critical question: is the regime fundamentally flawed, or should it be reformed and better regulated? A serious and structured analysis is required to determine whether the tax benefit still plays a positive role in the Portuguese economy — and, if so, whether its premature end should be reconsidered.

Read the full article here.