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V2559-17 10 October 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Foundation representatives' allowances are not exempt without an employment relationship

A query was raised regarding whether travel and subsistence expenses paid to foundation trustees can be exempt from Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that the tax-exempt allowance regime does not apply to foundation representatives due to the absence of an employment relationship, unless the expenses are incurred on behalf of third parties.

The question raised

Tax treatment under Personal Income Tax regarding the amounts paid to foundation trustees to compensate for the expenses incurred in their travel to attend meetings of such foundations.

The DGT's ruling

The regime of exempt per diems under Article 9 of the Regulations only applies to workers with an employment relationship characterized by dependency and alterity. For the expenses of foundation representatives not to be taxed, the foundation must directly provide the means of transport and accommodation. If the foundation merely reimburses expenses without proving that they strictly compensate for travel, or pays amounts for free allocation, these amounts are considered employment income subject to tax.

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