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V2197-20 29 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Requirements for exemption from foreign work duties

A company asks whether travel allowances for workers sent to Algeria are exempt from income tax. The DGT states that exemption is possible if the work is carried out for a non-resident entity and the intragroup services conditions are met.

The question raised

Whether the exemption provided for in letter p) of Article 7 of the Personal Income Tax Law is applicable, and the method for calculating the exempt income.

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. If the entity is a related party, the service must provide an advantage or benefit to the non-resident entity pursuant to the Corporate Income Tax Law (LIS). The exemption applies to remuneration accrued during the days of stay and to specific remuneration, subject to an annual limit of 60,100 euros. The calculation of the non-specific portion is performed through a proportional allocation based on the number of days in the year.

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