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V1517-22 24 June 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por trabajos en el extranjero

Foreign work exemption requires a labour or statutory relationship

A Spanish resident director enquired whether income from services rendered abroad could benefit from the exemption under article 7 p) of the LIRPF. The DGT responded that, as it involves a service agreement and not a labour relationship, the exemption does not apply.

The question raised

Whether, regarding the income received for services actually rendered abroad as a consequence of exercising the functions of Chief Operating Officer of the Spanish company, the application of the exemption regulated in Article 7 p) of the Personal Income Tax Law is appropriate.

The DGT's ruling

The exemption under Article 7 p) of the Personal Income Tax Law (LIRPF) applies solely to income from employment derived from an employment or statutory relationship, or special cases under Article 17.2 of the same law. If the relationship between the professional and the entity is a service agreement and not an employment relationship, said exemption is not applicable. Compliance with the requirements for performing work for non-resident entities does not compensate for the lack of an employment nature of the relationship.

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