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V1713-22 18 July 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Foreign work exemption requires intragroup service beneficial to non-resident entity

An employee of a Spanish hotel group who travels weekly to Portugal to manage operations asks whether the exemption under article 7 p) of the LIRPF applies. The DGT states that for the exemption to apply, the work must be genuinely carried out abroad and must constitute an intragroup service that provides a benefit or advantage to the non-resident entity.

The question raised

Application of the exemption regulated in Article 7 p) of Law 35/2006, on Personal Income Tax, to the indicated remuneration.

The DGT's ruling

To apply the exemption, the work must be effectively performed abroad and for a non-resident entity or permanent establishment. If the entity is a related party, the service must produce an advantage or benefit to the recipient, in accordance with Article 18 of the LIS. Management, budget control, or personnel activities are usually considered intra-group services. The exemption applies to income accrued during the days of stay and to specific remuneration, with a limit of 60,100 euros per year.

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