SIFIDE – Tax incentives for Company Investments in R&D

Contact person 
Deolinda Silva
Institution 
Innovation Agency
E-mail 
dsilva@adi.pt
Country 
Portugal
Do you want to share an instrument/policy or a knowledge Transfer practice? 
Innovation instrument(policy)
What are the following keywords/priorities which better fit the instrument/policy?  
Indirect support to business R&D (tax incentives and guaranteees)
Indicate the country from which the instrument (or policy) is 
Portugal
What is the title/name of the instrument/policy? 
SIFIDE – Tax incentives for Company Investments in R&D
Indicate the target group/beneficiaries of the instrument/policy 
All companies
What is the aim/objective? 
SIFIDE is aimed at encouraging R&D activities by Portuguese companies. It consists of a tax credit granted to companies that perform or contract R&D activities. There is an element of stimulus for companies already undertaking R&D activities to increase their commitment. This measure has been put into force again in 2005, after being eliminated in the 2005 budget, presented by the former Government. SIFIDE has been underlined by the former Socialist Governments (2005-2011) as a very important instrument for encouraging business firms R&D expenditures and for contributing towards to the Barcelona 3% objective. The 2011 budget introduced SIFIDE II, which has improvements in the measure with an aim to further promote R&D investments, in a context of Budget restrictions. SIFIDE II has been kept into force for 2012, in spite of even tighter budgetary constraints.
Give an overview of the instrument 
The main purpose of SIFIDE is to promote R&D activities by business firms. Tax incentives are considered as an important instrument for promoting firms' R&D activities. SIFIDE II has been meanwhile revised, having in mind the current budgetary and financial difficulties faced by the country. The level of incentives provided for 2012 has been reduced. However, the fact that the system has been kept into force is noteworthy. For companies without profits, or with low profits in the fiscal year concerned, the incentive may be carried on for six consecutive fiscal years. Research expenditures are defined as those incurred for acquiring new scientific or technological knowledge. Development expenditures correspond to those concerned with the exploitation of research results with a view to get new (or to significantly improve) raw materials, products, services or manufacturing processes.
What is the date of creation of this instrument? 
Wednesday, January 1, 1997
Is the instrument/policy still active? 
Active
Identify the main outputs/results (quantitative and qualitative) of the implementation of this instrument 
SIFIDE appears to be combined with other incentive systems for carrying out R&D projects. It is argued that SIFIDE has contributed to encourage new firms to launch R&D activities as well as to increase R&D expenditures by companies with already existing in house R&D infrastructures.
What is the co-financing/maximum rate allowed by the instrument/policy (if appl.)? 
N/A
Is this instrument/policy linked to a KT practice? 
No