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V2131-20 25 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Requirements for claiming exemption for work abroad

A company asks whether its workers deployed abroad to carry out installations for non-resident clients can benefit from the exemption under article 7 p) of the LIRPF. The DGT states that the exemption applies if the work is carried out for non-resident entities, the work site is outside Spain, and the destination country has a tax system similar to the IRPF and is not a tax haven.

The question raised

Whether the requirements for applying the exemption regulated in Article 7 p) of the Personal Income Tax Law are met.

The DGT's ruling

To apply the exemption, the work must be effectively performed abroad for a non-resident company or a permanent establishment abroad. The territory where it is performed must have a tax of an identical or analogous nature to the Personal Income Tax (IRPF) and must not be a tax haven. In the case of countries with a double taxation treaty and an information exchange clause, the tax requirement is considered met. The exemption is limited to 60,100 euros per year and is incompatible with the regime of excesses excluded from taxation.

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