The Portuguese Fiscal Earthquake

the Constitutional Court Ruling and the End of a Model

Abstract

This essay analyses the legal, fiscal and political impact of the ruling issued by the Portuguese Constitutional Court in April 2026, which declared unconstitutional the delegation, by ministerial order, of the power to define the high value-added activities eligible for the Non-Habitual Residents Regime (NHRR). Established by Decree-Law No. 249/2009 of 23 September and regulated as regards eligible professions by Ministerial Order No. 12/2010 and Ministerial Order No. 230/2019, the regime was in force for more than fifteen years without constitutional challenge, benefiting nearly 129,000 taxpayers and generating a tax expenditure of B1.741 billion in 2024. The ruling is grounded in the principle of statutory reservation in tax matters, enshrined in Articles 103 and 165 of the Portuguese Constitution, and puts at risk not only the NHRR – already revoked by Law No. 24-D/2022 – but also its successor regime, the Tax Incentive for Scientific Research and Innovation (IFICI), provided for in Article 58-A of the Tax Benefits Statute, and potentially other tax mechanisms dependent on administrative regulation. The essay concludes that a legislative response, with urgency and retroactive effect, is the only way to stabilise the situation without undermining Portugal’s credibility as a destination for international talent and investment.