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V0660-14 11 March 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Exemption from IRPF for foreign work under certain conditions

A technician temporarily posted to Portugal asks whether foreign work exemption applies. The DGT confirms that if there is no link between the employer and the recipient entity, the income is exempt, subject to an annual limit of 60,100 euros.

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 under Article 7(p) of the Personal Income Tax Law (LIRPF), the work must be performed for a non-resident entity or a permanent establishment abroad. The physical displacement of the worker is required, and the place of work must be outside of Spain. It is not necessary for the income to be taxed in the destination country; it is sufficient that an analogous tax exists and that it is not a tax haven. The exemption is limited to 60,100 euros per year.

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