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V2841-19 15 October 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Foreign work exemption requires recipient to be non-resident

A worker inquired whether income from services rendered in Germany for a German company could qualify for the exemption under article 7.p) of the LIRPF. The DGT states that the exemption applies only if all legal requirements are met, particularly that the recipient entity is non-resident.

The question raised

In relation to the income received in Germany, whether it may qualify for the exemption provided for in letter p) of Article 7 of the Personal Income Tax Law.

The DGT's ruling

To apply the exemption, the work must be performed for a non-resident company or a permanent establishment abroad. The displacement of the worker is required, and the workplace must be located outside of Spain. Furthermore, the country where the work is performed must have an analogous tax and must not be a tax haven, a requirement that is met with Germany. The exemption will depend on the ultimate beneficiary of the services being an entity that is not a resident in Spain.

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