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V1538-20 22 May 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por trabajos en el extranjero

Requirements for IRPF exemption for foreign work

The DGT clarifies that for intragroup services, it must be demonstrated that the activity generates a benefit or utility to the non-resident entity, and that territoriality and non-tax haven requirements are met.

The question raised

Whether the exemption provided for in letter p) of Article 7 of the Personal Income Tax Law is applicable.

The DGT's ruling

To apply the exemption, the work must be effectively performed abroad for a non-resident entity or a permanent establishment abroad. If the recipient entity is related, the service must produce an advantage or utility to the non-resident entity, pursuant to Article 18 of the Corporate Income Tax Law. Furthermore, a tax of a similar nature must be applied in the destination country, and it must not be a tax haven. The exemption is limited to 60,100 euros per year and is incompatible with the regime of excluded excess income.

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