On 18 June 2013 several tax measures promoting investment regarding production, internationalization and fostering job creation in Portugal were approved by the Decree- Law no. 82/2013, 17 June. Tax benefits of contractual nature may now be granted to eligible investment projects in amounts equal to or above 3 million euros.

The Business Research and Development Tax Incentives System (“Sistema de Incentivos Fiscais em Investigação e Desenvolvimento Empresarial II”/SIFIDE II) has been amended and now allows increased deductibility of certain research and development expenses, in accordance with a regime applicable until 2015. This measures are aimed at resident entities (or permanent establishments of nonresident entities) carrying out activities in agricultural, industrial, commercial and service businesses, which may be eligible according to the amended regime.

A special tax regime to support investment (“Regime Fiscal de Apoio ao Investimento”/RFAI) was also approved comprising tax incentives for investment in the agricultural, forestry, agro-industrial, touristic, and extractive and transforming industries (regime applicable until 2017). If certain requirements are met these incentives may consist, among others, in an exemption from municipal tax on transfers of immovable property (IMT), municipality tax on holding immovable property(IMI), stamp tax, and a partial deduction of the amount of tax due in any given fiscal year (variable according to the amount of the investment). However, not all expenses may be qualified as investment for the purposes of the RFAI regime, thus a careful a priori riskanalysis assessment of the expenses and the conditions of each investment is necessary.

Future approval of other investment tax incentives are foreseen such as the extraordinary tax credit (“Crédito Fiscal Extraordinário”, a partial deduction of the amount of tax due in any given fiscal year) and, regarding Corporate Income Tax (IRC), interest and royalty exemptions paid to associated enterprises resident in another EU Member-State.