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V1539-14 11 June 2014 · 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 and group services

The DGT confirms that exemption for foreign work applies only if the service provides a benefit or utility to the non-resident entity in accordance with corporate tax regulations.

The question raised

Whether the application of the exemption established in letter p) of Article 7 of Law 35/2006, of November 28, on Personal Income Tax is appropriate.

The DGT's ruling

To apply the exemption under Article 7(p) of the Personal Income Tax Law (LIRPF), the work must be effectively performed abroad and for a non-resident entity or permanent establishment. If the recipient entity is related to the employer, the service must produce an advantage or benefit to the non-resident entity pursuant to Article 16.5 of the Corporate Income Tax Law (TRLIS). Furthermore, an analogous tax to the Personal Income Tax must be applied in the destination country, and it must not be a tax haven. The portion of intra-group services corresponding to the Spanish entity shall not be covered by the exemption.

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