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V1848-15 12 June 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por trabajos en el extranjero

Requirements for the exemption of income from employment performed abroad and intra-group services

An employee of a Spanish company seconded abroad inquires whether they may apply the exemption provided in Article 7 p) of the Personal Income Tax Law (LIRPF). The DGT explains that there must be a physical displacement, that the work must be performed for non-resident entities (meeting intra-group service requirements), and that the country must not be a tax haven.

The question raised

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

The DGT's ruling

For the exemption to apply, 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 pursuant to the Corporate Income Tax Law (LIS). The portion of the service performed abroad corresponding to the Spanish entity is not exempt. The calculation is performed through a proportional allocation of days and specific remunerations, with an annual limit of 60,100 euros.

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