Patent Box Calculator 2026

Portugal’s Patent Box is the regime in Article 50.º-A of the CIRC: it deducts from taxable profit up to 85% of the net income from assigning or licensing registered patents, industrial designs or models, and copyright on computer programs. The cap is DQ/DT × RT × 85%, where the ratio compares qualifying R&D with the asset’s total expenditure.

How the calculation works, step by step

The regime does not apply to gross licence revenue. It is built in three layers, all inside the article itself:

1. Net balance of the period (para. 6). Income and gains of the period less the R&D costs incurred in that same period for the right.
2. Recovering the history (para. 7). Only the part exceeding the asset’s accumulated negative balance from prior periods counts as RT.
3. Nexus cap (para. 8). DQ/DT × RT × 85%, with DQ uplifted by 30% but never above DT, under paragraph 9(b).

In practice, the more R&D the company performs in-house or outsources to independent parties, the higher the ratio and the larger the deduction. R&D outsourced to related parties and the cost of buying the patent enter DT but not DQ, and therefore dilute the benefit.

The conditions that block most cases

Paragraph 3 requires cumulative compliance: the licensee must use the rights in a commercial, industrial or agricultural activity; the results of that use must not materialise in goods or services generating tax-deductible expenses in the licensor or in a group company with special relations; the licensee must not be resident in a jurisdiction on Portugal’s list of clearly more favourable tax regimes; and the company must keep accounting records that separate this income from the rest and identify the R&D costs attributable to the right. Paragraph 4 requires ancillary services included in the contract to be accounted for separately, as they do not benefit.

The costliest mistake: standardised software is not a royalty

Binding ruling 28845, approved on 25 January 2026, is explicit: only income in the nature of royalties falls within Article 50.º-A. A licence that merely lets the customer use standardised software in its own internal activity, without assigning rights or authorising commercial exploitation, produces ordinary business income and falls outside the regime. What does qualify is software adapted to the customer and the partial assignment of copyright for the purpose of commercial exploitation.

Confirm your asset’s eligibility and the required accounting segregation with the CFO 360 Diagnostic, see the SIFIDE II calculator for the R&D tax credit, or HVR’s tax consulting.

Frequently asked questions

What is the Patent Box regime in Portugal?

Patent Box is the common name for the regime in Article 50.º-A of the Portuguese Corporate Income Tax Code (CIRC). It allows a company to deduct from its taxable profit part of the income earned from assigning or temporarily licensing registered patents, registered industrial designs or models, and copyright on computer programs. The deduction is capped at 85% of the net income, multiplied by the ratio of qualifying R&D expenditure to total expenditure on the asset.

Which rights qualify under Article 50.º-A CIRC?

Only three, and only when registered: patents, industrial designs or models, and copyright on computer programs. The computer-programs limb was added by Law 2/2020 of 31 March, and the current wording of paragraph 1 comes from Law 20/2023 of 17 May. Trade marks, domain names, unregistered know-how and customer lists are not in the article and do not qualify.

What is the formula for the Patent Box deduction cap?

Paragraph 8 of Article 50.º-A caps the deduction at DQ/DT × RT × 85%. DQ is qualifying R&D expenditure, carried out in-house or outsourced to unrelated parties. DT is total expenditure on the asset, including R&D outsourced to related parties and, where applicable, the cost of acquiring the right. RT is total income from the asset. Paragraph 9(b) uplifts DQ by 30%, capped at DT.

Does licensing standardised software qualify?

As a rule, no. Binding ruling 28845, approved on 25 January 2026, concludes that only income in the nature of royalties falls within Article 50.º-A. Licences to use standardised software for the customer’s own internal use, with no transfer of intellectual property rights, are ordinary business income and fall outside the regime.

How much is the deduction worth in tax?

The deduction reduces taxable profit, so the actual saving is the deduction multiplied by the applicable IRC rate. In 2026 the general rate is 19%, and SMEs and Small Mid Caps pay 15% on the first EUR 50,000 of taxable income, under Article 87.º CIRC together with the transitional rule in Article 3(2) of Law 64/2025 of 7 November. Certified startups pay 12.5%.