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V1992-15 26 June 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por trabajos en el extranjero

The exemption for work performed abroad does not apply to members of associated labor cooperatives and requires recipient and territoriality requirements

A cooperative inquires whether its members and workers displaced to France may apply the exemption for work performed abroad. The DGT determines that members cannot apply it due to having a corporate rather than an employment relationship, whereas for workers, it will depend on whether the recipient of the work is a non-resident entity.

The question raised

Question posed: Whether the exemption provided for in letter p) of Article 7 of the Personal Income Tax Law applies to both the members of the cooperative and the company's labor personnel seconded to France.

The DGT's ruling

The exemption under Article 7.p) of the LIRPF does not apply to the members of an associated labor cooperative because their relationship is corporate and not employment-based. For personnel with an employment relationship, the exemption requires that the work be performed for a non-resident company or a permanent establishment abroad. Furthermore, it must be proven that the work is provided to a non-resident entity, even if the contract is with a Spanish company acting for a third party abroad. It is not necessary for the income to have been effectively taxed in the destination country; it is sufficient that an analogous tax and an information exchange agreement exist.

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