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V0702-20 3 April 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rentas exentas

Possibility of claiming exemption for foreign work for in-kind remuneration

An employee of a Spanish company is seconded to France for two months, receiving medical insurance, rent and a car in kind. The question is whether these in-kind payments may qualify for the exemption relating to foreign work.

The question raised

Whether the exemption regulated in Article 7 p) of the Personal Income Tax Law may be applied to the aforementioned payments in kind during the period the employee is located in France.

The DGT's ruling

Income from employment received for work effectively performed abroad is exempt pursuant to Article 7 p) of the Personal Income Tax Law (LIRPF), provided that the requirements are met and the limit of 60,100 euros per annum is observed. Regarding medical insurance, the exemption in kind requires that the coverage extends to the employee (and family members) and that the premiums do not exceed 500 euros per person per annum. The company must calculate the withholding tax rate based on the total amount of taxable and non-exempt remuneration received by the employee during the year.

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