Portugal › Comparisons › IFICI (NHR 2.0) vs No special regime
IFICI (NHR 2.0) vs No special regime
IFICI's 20% flat rate on qualifying Portuguese employment and self-employment income beats standard IRS when income is high enough that the effective IRS rate exceeds 20%. The crossover point is roughly €65,000–70,000 for most single taxpayers.
Key differences
| Aspect | IFICI (NHR 2.0) | No special regime |
|---|---|---|
| Rate type | 20% flat on qualifying Cat. A/B | Progressive 12.5%–48% |
| Deductions | Standard deductions still apply (PPR, health, etc.) | Full deduction system (personal allowance, health, PPR, etc.) |
| Foreign income | Taxed at standard rates — no IFICI benefit | Standard rates on all income categories |
| Break-even point (single) | ~€65,000 gross employment income | Below this: standard IRS typically better |
| Application required | Yes — AT pre-certification of qualifying activity | No — default regime |
| Duration | 10 years | Unlimited |
Choose IFICI (NHR 2.0) if…
- Single taxpayers with Portuguese-source qualifying income above ~€65,000
- Married taxpayers where total qualifying income exceeds the break-even point
- Those with significant non-deductible income where credits don't reduce the effective rate below 20%
- Highly compensated professionals (tech, consulting, finance) in Portugal
Choose No special regime if…
- Lower-income taxpayers (below ~€40,000) where the progressive effective rate is well below 20%
- Taxpayers with large deductions (PPR, health, education, dependents) that push the effective rate below 20%
- Married couples with significant income splitting benefits
- Those whose activity does not qualify for IFICI
Bottom line
Run the numbers with your specific income level and deductions in the calculator. The 20% crossover point is around €65k for a single taxpayer, but varies with deductions, marital status, and income mix. IFICI is almost always better above €80k; standard IRS is almost always better below €40k.
Frequently asked questions
Can I have both IFICI and standard IRS deductions?
IFICI applies to the qualifying income at 20%. Standard deductions (PPR credit, health, etc.) can still reduce other tax liability. The personal deduction mechanism differs under IFICI — consult a TOC for your specific situation.
What happens after 10 years of IFICI?
After the 10-year IFICI period ends, you revert to standard IRS unless you re-qualify for another regime. IFICI cannot be renewed.
IFICI (NHR 2.0) details
Eligibility, rates, legal basis
→No special regime details
Eligibility, rates, legal basis
→Model this comparison with your actual income
Enter your income in the calculator and switch between IFICI (NHR 2.0) and No special regime in real time to see the exact IRS difference for your situation.
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