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V0742-15 6 March 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por trabajos en el extranjero

Requirements for claiming exemption for foreign work (Art. 7.p LIRPF)

A worker deployed to Mexico for marketing tasks asks whether he can claim exemption for foreign work income. The DGT states that eligibility depends on proving the work is carried out for a non-resident entity and that all other legal requirements are met.

The question raised

Application of the exemption provided for in letter p) of Article 7 of the Personal Income Tax Law, method of calculation, and method of proving stay abroad.

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. It is not necessary for the income to be effectively taxed in the destination country; it is sufficient that an analogous tax is applied and that the country is not a tax haven. The calculation of the exempt portion is carried out through a proportional distribution of the days of stay, including specific remunerations. The burden of proof regarding these facts lies with the taxpayer through means of evidence valid under Law.

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