RFAI: What is it? How does it work? Everything you need to know!

There are several Tax Benefits available to Portuguese companies to foster innovation, competitiveness, and sustainable growth of Portuguese businesses.

However, each Tax Benefit has different characteristics that distinguish them from each other, whether in terms of objective or deduction rate. These differences make each benefit unique.

In this article, we will cover everything you need to know about the RFAI - Tax Regime for Investment Support.

What is RFAI and how does it work?

The RFAI – Tax Regime for Investment Support is a Tax Benefit introduced by the Portuguese Government to support investment in strategic sectors of the economy, promote innovation, encourage sustainable growth, and boost business competitiveness, job creation and retention, regional development, and reinforcement of companies' capital structure.

This benefit allows companies to deduct a percentage of their investments in non-current assets (both tangible and intangible) aimed at productive investment from their taxable income. Productive Investment refers to investments that contribute to the production of goods and services, capital formation, and employment. In section 3, we will discuss in detail which expenses can be considered for the tax benefit calculation.

What is the support rate for RFAI?

The support granted under RFAI is determined based on two criteria: the region where the company is located and the amount of investment made. The regions are defined in the Regional Aid Map. Here are the support rates:

For the North, Centre, Alentejo*, Azores, and Madeira regions, the following support rates apply:

• 30% deduction for investments below €15,000,000 (Fifteen Million Euros)
• 10% deduction for investments above €15,000,000 (Fifteen Million Euros)

For “C” regions defined in the Regional Aid Map, the support rate is limited to 10% of the total investment.

Additionally, companies can benefit from exemptions and/or reductions in IMI, IMT, and Stamp Duty related to the construction or acquisition of buildings that constitute eligible applications, subject to recognition of investment interest by municipal authorities.

Which economic activities can benefit from RFAI?

Companies that make productive investments and whose activity falls within the following sectors are eligible for RFAI:

Eligible Industrial Activities under RFAI

• Extractive Industry (divisions 05 to 09)
• Manufacturing Industry (divisions 10 to 33)

Eligible Tourism and Restaurant Activities under RFAI

• Accommodation (division 55)
• Restaurants and Similar (division 56)
• Activities of interest to tourism (subclasses 77210, 90040, 91041, 91042, 93110, 93210, 93292, 93293, and 96040)

Eligible Service Activities under RFAI

• Publishing Activities (division 58)
• Cinematographic, video, and television programme production activities (group 591)
• IT consultancy and programming and related activities (division 62)
• Data processing, hosting, and related activities and web portals (group 631)
• Scientific research and development activities (division 72)
• Administrative and support services provided to companies (classes 82110 and 82910)

For a more comprehensive view of eligible sectors and how to apply, contact Yunit Consulting.

YUNIT Consulting: RFAI Experts with a 100% Success Rate

Yunit has invested in creating multidisciplinary teams capable of understanding the specificities of each business, assuming a strategic role in the growth of Portuguese companies.

Today, our teams are a blend of experts in Management, Finance, and Engineering from various fields, including Electronics, Mechanics, Chemistry, Biomedical, Nanotechnology, Biomaterials, Environmental, Materials, Agronomy, and more.

This strategic focus has enabled Yunit to achieve a 100% success rate in all RFAI processes handled.