Portugal’s 2027 Budget Bill extends R&D and business tax incentives

Employment and R&D incentives

The proposal remains subject to parliamentary approval. Article 61 would amend article 19-B of the Tax Benefits Statute, which allows qualifying salary-increase costs to be counted at 200% when determining taxable profit. Both qualifying wage-growth tests would fall from 4.6% to 4.5%: the business-wide average annual base salary and the annual base salary of workers paid no more than the previous year’s company average.^[1][2]

Article 62 would extend the SIFIDE II research and development incentive by one year. The current Investment Tax Code permits Portuguese-resident corporate taxpayers carrying on agricultural, industrial, commercial or service activities, and non-residents with a Portuguese permanent establishment, to deduct qualifying R&D expenditure incurred through 31 December 2026. The proposal would extend that period through 31 December 2027.^[1][3]

Housing, compliance and sector measures

A temporary employee-housing incentive would exempt qualifying housing supplied by an employer from personal income tax and social contributions during 2027. Employer-owned, acquired, constructed or converted worker housing could qualify for double tax depreciation. The relief would exclude workers holding at least 10% of the employer’s capital or voting rights.^[1]

The package would postpone mandatory submission of the accounting SAF-T file until periods beginning in 2028, accept PDF invoices through 31 December 2027 and relieve qualifying profitable and compliant companies or start-ups from the increase in autonomous taxation that can otherwise apply under Corporate Income Tax Code article 88(14). Qualifying productivity and profit-sharing bonuses of up to 6% of annual base pay would receive an employee tax and social-contribution exemption where the employer meets the revised wage test.^[1][2]

The proposal also continues the banking, pharmaceutical, medical-device and energy-sector contributions through 2027. Separately, Portugal’s general corporate income tax rate is already scheduled to fall to 18% for tax periods beginning in 2027 under Law 64/2025; that reduction is not created by this Budget Bill. Article 139 would generally commence the Budget measures on 1 January 2027 if enacted.^[1][4]