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V1565-14 13 June 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por trabajos en el extranjero

Exemption from income tax possible for foreign work if conditions met

A worker carrying out maintenance in various foreign countries asks whether they can benefit from the exemption of work income due to foreign employment. The DGT confirms this is possible if the work is carried out for non-resident entities in countries with a tax equivalent to the IRPF or with double taxation agreements.

The question raised

Application to the remuneration received from the company of the exemption provided for in letter p) of Article 7 of the Personal Income Tax Law.

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 outside of Spain for a non-resident entity or a permanent establishment abroad. The territory must have a tax of an identical or analogous nature to the Personal Income Tax and must not be a tax haven, this point being considered fulfilled if a double taxation treaty with an exchange of information clause exists. In countries without a treaty, such as Peru, Angola, or Nigeria, the existence of a similar tax must be proven. It is not necessary that the income has been effectively taxed abroad.

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