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V3011-17 20 November 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Requirements for tax exemption from foreign work

A public servant who worked six months on a service commission in Somalia asks whether he can claim the foreign work exemption. The DGT states that the exemption cannot be confirmed as there is no evidence that the work was carried out for a non-resident entity or a foreign permanent establishment.

The question raised

Whether the exemption regulated in letter p) of Article 7 of the Personal Income Tax Law is applicable.

The DGT's ruling

To apply the exemption under Article 7(p) of the Personal Income Tax Law (LIRPF), three requirements must be met: that the work is effectively performed abroad, that it is provided to a non-resident entity or a permanent establishment abroad, and that an tax of an identical or analogous nature to the IRPF is applied in the destination country, provided it is not a tax haven. In this case, it is not deduced that the work is performed for a non-resident entity or a permanent establishment. Regarding Somalia, as there is no tax treaty with Spain, compliance with the tax requirement will depend on whether an analogous tax exists and whether it is not a tax haven.

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