The two IFICI benefits (and one big catch)
IFICI gives two distinct benefits that work together:
- 20% flat rate on qualifying Portuguese employment/self-employment income β versus progressive rates that climb to 48%. The higher your Portuguese salary, the bigger the saving.
- Foreign income exemption on most foreign dividends, interest, royalties, capital gains and rental β provided it could be taxed in the source country under a tax treaty.
- Unlike Italy's lump sum, IFICI is proportional β it helps moderate high earners (β¬60kβ200k), not just the ultra-wealthy. That's why it suits relocating professionals.
The calculator above shows your effective rate under IFICI versus normal Portuguese tax, and your annual saving.
Who qualifies β and the pension catch
IFICI is far more selective than the old NHR. To qualify you need:
- New tax residency β not Portuguese tax resident in the previous 5 years.
- A qualifying degree β EQF level 6 (bachelor's) or higher, or a PhD.
- A qualifying activity β science, technology, innovation, healthcare, green energy, R&D, or roles at certified startups/companies/research bodies.
The big catch: unlike the old NHR, foreign pension income is NOT exempt under IFICI. Retirees who would have loved the old 10% pension rate generally do not benefit here. IFICI is built for working professionals who create value inside Portugal, not for passive retirees.
IFICI vs Italy's flat tax β which fits you?
Portugal's IFICI and Italy's flat tax are the two headline EU regimes β but they suit opposite profiles:
- Portugal IFICI β 20% proportional. Tax scales with income. Best for working professionals earning, say, β¬60kβ250k in a qualifying field. No minimum income to "make it worth it."
- Italy β β¬300k fixed lump sum. A flat amount regardless of income, only worth it above roughly β¬700k of income. Built for the ultra-wealthy with large passive/foreign income.
Rule of thumb: if you're a high-earning professional relocating to work, IFICI usually wins. If you're ultra-wealthy living off large foreign/passive income, Italy's fixed cap can be cheaper. Run both β see our Italy flat tax calculator.
Frequently asked questions
Q. Who is eligible for IFICI?
New Portuguese tax residents (not resident in the prior 5 years) with an EQF 6+/PhD qualification who work in a qualifying activity β science, technology, innovation, healthcare, green energy, R&D, or certified startups/companies. Retirees and passive-income-only individuals generally don't qualify.
Q. Can my family join the regime?
Yes. Each family member (spouse, children, dependants) can opt in for an extra β¬50,000/year (2026 entrants; β¬25,000 for earlier ones), covering their own foreign income under the same flat regime. This calculator adds it to your total.
Q. How long does IFICI last?
10 years from when you become a Portuguese tax resident, and it is non-renewable. You must keep working in a qualifying activity each year to retain the benefit.
Q. Is foreign income really tax-free?
Most foreign passive income is exempt if it could be taxed in the source country under the relevant double-tax treaty (Portugal has 70+ treaties). But anti-abuse rules require genuine substance, blacklisted jurisdictions are excluded, and foreign pensions are taxed. Confirm your specific income types with an adviser.
Sources: Portugal IFICI regime (Incentivo Fiscal Γ Investigação CientΓfica e Inovação, NHR successor effective 2024); Portuguese IRS progressive brackets 2026; qualifying-activity rules pending full regulatory clarification. Normal tax shown is a simplified IRS estimate excluding the solidarity surcharge and deductions. This is an independent informational tool, not tax, legal or immigration advice. Verify all figures and eligibility with a licensed Portuguese tax adviser before relocating.
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