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V0888-20 16 April 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Diplomatic missions not considered permanent establishments for foreign work exemption

The DGT determines that income from services rendered in diplomatic missions in Cape Verde and Mauritania does not qualify for exemption under article 7(p) of the LIRPF, as diplomatic missions are not deemed permanent establishments.

The question raised

Question posed: In the case of the two individuals referred to, whether the income received for the provision of services to the foundation in the foundation's establishments in Cape Verde and Mauritania is subject to the exemption regulated 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. Diplomatic missions or embassies do not possess their own legal personality nor are they considered permanent establishments, as they do not engage in economic activity. Therefore, as no permanent establishment exists in such locations, the necessary requirement for the exemption is not met.

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