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V1926-15 18 June 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Exemption from IRPF available for non-resident company's foreign work

A Spanish resident employee provides services in Portugal for a Portuguese company. The DGT confirms that the exemption for foreign work income applies.

The question raised

Whether the exemption provided for in letter p) of Article 7 of the Personal Income Tax Law is applicable.

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 for a non-resident entity or a permanent establishment abroad. It is required that in the territory where the work is performed, a tax of an identical or analogous nature is applied and that it is not a tax haven. It is not necessary for the income to have been effectively taxed abroad; it is sufficient that the country has an information exchange agreement with Spain. The exemption is limited to 60,100 euros per year.

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