The Portuguese Patent & Software Box: A Strategic Tax Incentive for AI and Innovation

The Portuguese P&S Box establishes an 85% corporate income tax (CIT) exclusion on net income derived from agreements for the transfer or temporary use of patents, designs, models, or software copyrights. Under this incentive, the net eligible income subject to CIT may be reduced to 15%, providing a significant tax relief to businesses that generate eligible income through intellectual property (IP).

Despite some uncertainties regarding its scope and interpretation, the regime is an effective tool for companies that seek to develop and monetise their IP (through royalties and, in our view, also through licensing or outright sales).

With the global focus increasingly shifting toward artificial intelligence (AI) and digital innovation, Portugal’s P&S Box serves as a key incentive for AI developers and tech companies looking to establish operations in an innovation-friendly jurisdiction.

You can read the full article here.