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V1455-14 2 June 2014 · SG de Fiscalidad Internacional Criterion in force
IRPF · residencia fiscal

Taxation of foreign earnings depends on fiscal residence and exemption criteria

A Spanish employee working in Colombia asks how he will be taxed. The DGT explains that first his fiscal residence must be determined, and if he is a Spanish resident, the possible application of the exemption for foreign work must be assessed.

The question raised

Method of taxation

The DGT's ruling

If the worker is a tax resident in Spain, they shall be taxed on their worldwide income, although they may apply the exemption under Article 7.p of the LIRPF if they meet the requirements of performing the work for a non-resident entity and in a country with an information exchange agreement. If they are a resident in Colombia, they shall only be taxed in Spain on income derived from activities carried out in Spanish territory. In the event of a change of residence, there is a procedure for withholdings to transition from IRPF to IRNR.

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