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V2535-14 30 September 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por trabajos en el extranjero

Requirements for IRPF exemption for foreign work by non-resident entities

A company asked whether its employees sent abroad to technically advise local distributors could benefit from the exemption for foreign work. The DGT responds that this is possible provided the physical relocation requirement is met, the recipient is a non-resident entity, and the country fulfils tax treaty conditions.

The question raised

Application of the exemption provided for in letter p) of Article 7 of the Personal Income Tax Law regarding employees seconded abroad by the applicant to provide support services and technical and commercial advisory to distributors.

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 with the workplace located temporarily outside of Spain. The recipient of the work must be a non-resident entity or a permanent establishment abroad. Furthermore, a tax of a similar nature to the Personal Income Tax must be applied in the destination country, and it must not be a tax haven. The exemption is limited to 60,100 euros per year.

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