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V2296-14 8 September 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimiento del trabajo

Travel compensation is income, but may be exempt if conditions met

A company asks whether travel compensation of 2,200 euros per trip to Algeria has specific tax treatment. The DGT states it is income from work subject to withholding, although exemption for foreign work or meal allowances may apply if legal requirements are met.

The question raised

Tax treatment, for the purposes of Personal Income Tax, applicable to the economic compensation to be paid to the worker for each trip to Algeria.

The DGT's ruling

The compensation constitutes employment income subject to withholding tax pursuant to Article 17 of the Personal Income Tax Law (LIRPF). The exemption under Article 7(p) of the LIRPF could apply if the work is performed for a non-resident entity in a country with an information exchange agreement, such as Algeria. However, the application of the exemption for work performed abroad is incompatible with the regime for excessive remuneration. Furthermore, the general regime for per diems does not apply if the worker is hired for a specific project at the destination, as it would be considered their habitual place of work.

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