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V0365-14 13 February 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por trabajos en el extranjero

Foreign work exemption depends on genuine intragroup services

A Spanish resident auditor asks whether she can claim IRPF exemption for monthly trips to audit foreign group subsidiaries. The DGT states that exemption only applies if the work constitutes genuine intragroup services that provide a benefit or utility to the foreign entity.

The question raised

Whether the application of the exemption established in letter p) of Article 7 of Law 35/2006, of November 28, on Personal Income Tax is appropriate.

The DGT's ruling

To apply the exemption under Article 7(p) of the LIRPF, the work must be effectively performed abroad for a non-resident entity or a permanent establishment. In corporate groups, there must be an intra-group service that produces an advantage or benefit to the recipient entity, pursuant to Article 16.5 of the TRLIS. Activities carried out by a parent company for its own interest as a shareholder, such as audits that only benefit the parent company, are not considered intra-group services. Furthermore, an analogous tax must be applied in the destination country, and it must not be a tax haven.

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