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V2507-15 5 August 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Requirements for the exemption of income from work performed abroad

An engineer seconded to Algeria by a Spanish company asks whether his employment income is exempt due to working abroad. The DGT indicates that the exemption depends on meeting specific requirements, especially that the work is performed for a non-resident entity or a permanent establishment abroad.

The question raised

Question posed: Whether, regarding the income received for the work performed abroad, the exemption provided for in Article 7 p) of Law 35/2006, of November 28, on Personal Income Tax, is applicable.

The DGT's ruling

To apply the exemption under Article 7 p) of the LIRPF, the work must be effectively performed abroad, for a non-resident entity or permanent establishment, and in a territory with an analogous tax that is not a tax haven. If the recipient is a related entity, there must be an intra-group provision of services that produces an advantage or benefit for the non-resident entity. In the case of intra-group services, the portion corresponding to services provided to the Spanish entity shall not be covered by the exemption.

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