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V1828-15 10 June 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Requirements for the exemption of income from work performed abroad

A company inquires whether an employee seconded abroad to perform sales manager functions may apply the exemption under Article 7 p) of the Personal Income Tax Law (LIRPF). The DGT indicates that the exemption depends on the work being performed for a non-resident entity or a permanent establishment abroad and the fulfillment of intra-group service requirements.

The question raised

Question posed: Whether the exemption established in Article 7 p) of Law 35/2006, of November 28, on Personal Income Tax is applicable.

The DGT's ruling

To apply the exemption, the work must be effectively performed abroad and for a non-resident entity or a permanent establishment abroad. In cases involving corporate groups, there must be an intra-group service that produces an advantage or benefit to the non-resident entity, pursuant to the Corporate Income Tax Law (LIS). The exemption shall not apply to the portion of services performed abroad that correspond to services provided to the Spanish entity. Furthermore, the destination country must have an analogous tax and must not be a tax haven.

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