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V1274-18 18 May 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Exemption for foreign work requires non-resident entity or permanent establishment

A consultancy company asks whether its employees working abroad can benefit from the exemption under article 7 p) of the LIRPF. The DGT responds that the exemption depends on the work being carried out for a non-resident entity or a permanent establishment abroad, where a similar tax applies and not a tax haven.

The question raised

Question raised In relation to the remuneration received by said persons for the days worked abroad, whether the exemption regulated in Article 7 p) of the Personal Income Tax Law is applicable.

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 company or entity not resident in Spain or a permanent establishment abroad. It is necessary that the worker physically travels and that the workplace is temporarily located outside of Spain. Furthermore, an identical or analogous tax must apply in the territory where the work is performed, and it must not be a tax haven. The exemption shall apply to the remuneration for the days of stay abroad, with a limit of 60,100 euros per year.

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