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V0283-15 26 January 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por trabajos en el extranjero

Exemption for foreign work possible if recipient is a non-resident entity

A Spanish company subcontracts services to a German entity and asks whether its displaced workers can claim the exemption for foreign work. The DGT confirms it is possible if the conditions for displacement and a non-resident recipient are met.

The question raised

Possibility of applying the exemption provided for in letter p) of Article 7 of the Personal Income Tax Law.

The DGT's ruling

Employment income is exempt if it is effectively performed abroad for a non-resident entity or a permanent establishment abroad. The physical displacement of the worker and the location of the workplace outside of Spain are required. Furthermore, the destination country must have an analogous tax and not be a tax haven, or must have a double taxation treaty with an exchange of information. The exemption is subject to an annual limit of 60,100 euros.

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