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V2846-14 20 October 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Exemption for foreign work not applicable if employer is Spanish resident

A Spanish public university researcher planning work stays in Germany, USA and Costa Rica asks whether foreign work exemption applies. The DGT states it does not, as the work is not performed for a non-resident entity.

The question raised

Application of the exemption established in letter p) of Article 7 of Law 35/2006, of November 28, on Personal Income Tax.

The DGT's ruling

To apply the exemption under Article 7(p) of the Personal Income Tax Law (LIRPF), the work must be performed for a company or entity that is not resident in Spain or for a permanent establishment abroad. Even if the worker physically travels outside the country, if the employer is a resident entity, the income is fully subject to taxation. In this case, as the contract is with a Spanish university, the requirements of the regulation are not met.

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