7 July 2021
Have you heard about these Tax Benefits?
DLRR
DLRR - Deduction for Retained and Reinvested Profits is an incentive measure for SMEs, which allows retained profits reinvested in relevant applications to be deducted from IRC.
The DLRR is available to IRC taxpayers resident in Portugal, as well as non-resident taxpayers with a permanent establishment in Portugal, whose main activity is of a commercial, industrial or agricultural nature.
Micro and small companies can enjoy a deduction of 50% of the IRC collection. The maximum amount of retained and reinvested profits in each tax period is 12,000,000 euros per taxpayer.
RFAI
The RFAI - Investment Support Tax Regime is a tax benefit that allows companies to deduct a percentage of the investment made in non-current assets (tangible and intangible) from the tax assessed.
The RFAI is a regional aid, as such, in mainland Portugal, the eligible regions are the North, Center, Alentejo, Algarve, Setubal Peninsula and some areas of Greater Lisbon. The Autonomous Regions of Azores and Madeira are also covered by the RFAI.
The tax benefit of the RFAI corresponds to a deduction of 25% of the relevant investment for investments up to 15,000,000 euros, and 10% for the remainder. In the case of a start-up company, the RFAI can compete up to 100% of the collection.
SIFIDE
SIFIDE - Sistema de Incentivos Fiscais à Investigação e ao Desenvolvimento Empresarial (Tax Incentive System for Business Research and Development) aims at increasing companies' competitiveness, by supporting companies in their efforts towards Innovation & Development through the deduction of the respective expenses from the IRC collection.
All IRC taxpayers whose main activity is of an agricultural, industrial, commercial or services nature can apply for this support system.
CFEI II - The deadline has already expired.
The CFEI - Extraordinary Investment Tax Credit is a tax benefit reintroduced in this second version (CFEI II) and created by the Supplementary State Budget for 2020. This benefit means that part of the investments made between 07.01.2020 and 06.30.2021 can be deducted from the taxable income.
The beneficiaries are IRC taxpayers whose main activity is of a commercial, industrial or agricultural nature.
The CFEI II corresponds to a deduction to the taxable income of 20% of the investments in relevant applications in each year (2020 and 2021), up to a limit of €5,000,000.00. Deduction to the taxable income is allowed up to 70% of the taxable income each year and the amount that cannot be deducted due to insufficient taxable income has a 5-year carry forward period.
RCCS
The RCCS - Return on Conventional Remuneration of Capital Stock translates into a deduction from the taxable income of companies of a percentage of the contributions made in cash or through the conversion of credits or through the use of profits from the fiscal year itself in the context of the incorporation of the company or the increase of its capital stock. This tax benefit aims to benefit the capitalization of companies through equity capital without recourse to third party capital.
It applies exclusively to cash contributions for the incorporation of companies or the increase of the share capital of the beneficiary company, to contributions in kind made to increase the share capital that correspond to the conversion of credits into capital, and to capital increases using the profits generated in the fiscal year itself, provided that, in the latter case, the capital increase is registered until the delivery of the income tax return for the fiscal year in question.
DLRR - Deduction for Retained and Reinvested Profits is an incentive measure for SMEs, which allows retained profits reinvested in relevant applications to be deducted from IRC.
The DLRR is available to IRC taxpayers resident in Portugal, as well as non-resident taxpayers with a permanent establishment in Portugal, whose main activity is of a commercial, industrial or agricultural nature.
Micro and small companies can enjoy a deduction of 50% of the IRC collection. The maximum amount of retained and reinvested profits in each tax period is 12,000,000 euros per taxpayer.
RFAI
The RFAI - Investment Support Tax Regime is a tax benefit that allows companies to deduct a percentage of the investment made in non-current assets (tangible and intangible) from the tax assessed.
The RFAI is a regional aid, as such, in mainland Portugal, the eligible regions are the North, Center, Alentejo, Algarve, Setubal Peninsula and some areas of Greater Lisbon. The Autonomous Regions of Azores and Madeira are also covered by the RFAI.
The tax benefit of the RFAI corresponds to a deduction of 25% of the relevant investment for investments up to 15,000,000 euros, and 10% for the remainder. In the case of a start-up company, the RFAI can compete up to 100% of the collection.
SIFIDE
SIFIDE - Sistema de Incentivos Fiscais à Investigação e ao Desenvolvimento Empresarial (Tax Incentive System for Business Research and Development) aims at increasing companies' competitiveness, by supporting companies in their efforts towards Innovation & Development through the deduction of the respective expenses from the IRC collection.
All IRC taxpayers whose main activity is of an agricultural, industrial, commercial or services nature can apply for this support system.
CFEI II - The deadline has already expired.
The CFEI - Extraordinary Investment Tax Credit is a tax benefit reintroduced in this second version (CFEI II) and created by the Supplementary State Budget for 2020. This benefit means that part of the investments made between 07.01.2020 and 06.30.2021 can be deducted from the taxable income.
The beneficiaries are IRC taxpayers whose main activity is of a commercial, industrial or agricultural nature.
The CFEI II corresponds to a deduction to the taxable income of 20% of the investments in relevant applications in each year (2020 and 2021), up to a limit of €5,000,000.00. Deduction to the taxable income is allowed up to 70% of the taxable income each year and the amount that cannot be deducted due to insufficient taxable income has a 5-year carry forward period.
RCCS
The RCCS - Return on Conventional Remuneration of Capital Stock translates into a deduction from the taxable income of companies of a percentage of the contributions made in cash or through the conversion of credits or through the use of profits from the fiscal year itself in the context of the incorporation of the company or the increase of its capital stock. This tax benefit aims to benefit the capitalization of companies through equity capital without recourse to third party capital.
It applies exclusively to cash contributions for the incorporation of companies or the increase of the share capital of the beneficiary company, to contributions in kind made to increase the share capital that correspond to the conversion of credits into capital, and to capital increases using the profits generated in the fiscal year itself, provided that, in the latter case, the capital increase is registered until the delivery of the income tax return for the fiscal year in question.
