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V0097-21 28 January 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por trabajos en el extranjero

Foreign work exemption requires service to a non-resident entity

A company asks whether an employee's earnings from leading a global project for an international group can qualify for the foreign work exemption. The DGT explains that the exemption applies only if the service is rendered to a non-resident entity or a permanent establishment abroad, meeting intragroup service requirements.

The question raised

Application of the exemption regulated in Article 7 p) of the Personal Income Tax Law. In particular:

The DGT's ruling

To apply the exemption under Article 7 p) of the Personal Income Tax Law (LIRPF), the work must be effectively performed abroad, for a non-resident entity or permanent establishment, and in a territory with an analogous tax that is not a tax haven. In intra-group services, there must be an advantage or benefit for the non-resident entity, pursuant to Article 18 of the Corporate Income Tax Law (LIS). The exemption applies to remuneration accrued during the days of stay and to specific remuneration, with a limit of 60,100 euros per year. A bonus cannot be considered specific remuneration if the work is not performed entirely abroad.

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