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V0766-20 7 April 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Foreign currency salaries must be converted to euros using the official exchange rate

A tax resident in Spain working in Gibraltar asks how to declare a salary received in British pounds. The DGT rules that the amount must be converted into euros by applying the official exchange rate from the European Central Bank.

The question raised

Since the taxpayer must report said salary in euros in their income tax return, they wish to know how this must be done.

The DGT's ruling

To complete the Personal Income Tax return, if the transaction is carried out in a currency other than the euro, it must be converted into the latter by applying the official exchange rate. The official rate is considered to be that published by the European Central Bank, either directly or through the Bank of Spain. Currency exchange differences may generate capital gains or losses if they do not derive from an economic activity.

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