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V2839-20 22 September 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · renta mundial

Foreign service remuneration may be exempt in Spain under certain conditions

A Spanish resident asked whether income from working four months for a French public ministry should be taxable in Spain. The DGT explains that, under the Double Taxation Convention, such income may be exempt if it is not part of an industrial or commercial activity, or if the exemption for foreign work is met under legal requirements.

The question raised

Whether such employment income should be taxed in France.

The DGT's ruling

According to the Spanish-French Convention, remuneration paid by a State to a natural person for services rendered to it may only be taxed in that State, unless such services are performed in the framework of an industrial or commercial activity. To apply the exemption under Article 7.p of the Personal Income Tax Law (LIRPF), the work must be performed for a non-resident entity or a permanent establishment abroad, and in a territory with an analogous tax that is not a tax haven. The exemption applies to income accrued during the days of stay abroad, with an annual limit of 60,100 euros.

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