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V0489-16 8 February 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · retenciones

Exempt income from work performed abroad is not subject to Personal Income Tax withholding

A worker with a temporary contract for a project abroad inquires whether the Personal Income Tax withholding in her payslips is correct. The DGT explains that exempt income is not subject to withholding and details the requirements for the exemption for work performed abroad.

The question raised

Subjectivity to withholding of the salaries received by the inquirer from the company that hired her.

The DGT's ruling

Exempt income and travel allowances and expenses excluded from taxation are not subject to withholding or payment on account. For income from work performed abroad to be exempt, it must be performed for a non-resident entity in a territory with an analogous tax that is not a tax haven. The base for calculating the withholding rate shall be the total amount of taxable and non-exempt remuneration that the worker is to receive during the year.

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