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V0482-15 6 February 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por trabajos en el extranjero

Requirements for IRPF exemption for foreign work

A Spanish company asks whether its workers deployed abroad can claim exemption under article 7.p) of the IRPF law when providing advisory services to non-resident distributors. The DGT responds that the exemption applies if the work is carried out for a non-resident entity and the territoriality and tax requirements are met.

The question raised

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

The DGT's ruling

To apply the exemption for work performed abroad, three requirements must be met: physical displacement with a temporary place of work outside Spain, that the work is performed for a non-resident entity or a permanent establishment abroad, and that a tax of a similar nature is applied in the destination country and it is not a tax haven. In the case of advisory services to distributors who make firm purchases, the requirement regarding the non-resident recipient is considered met. However, if the work aims to achieve commercial agreements for the Spanish company itself, the recipient is the resident entity and the exemption does not apply.

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