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V3181-15 20 October 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Remuneration for director functions cannot benefit from the exemption for work performed abroad

It is inquired whether a chief executive officer performing functions in Portugal for a branch can apply the Personal Income Tax (IRPF) exemption for work performed abroad. The DGT responds that remuneration for the position of director does not qualify for this exemption.

The question raised

Whether, in light of the tax reform and the new treatment of remuneration for members of the Board of Directors (in particular, Article 15.e) of the Corporate Tax Law, the exemption established in letter p) of Article 7 of the Personal Income Tax Law would be applicable to the work performed by Mr. xx in Portugal for the benefit of the Portuguese branch.

The DGT's ruling

The exemption under Article 7.p) of the LIRPF applies to income from employment derived from an employment or statutory relationship. Remuneration for the exercise of functions inherent to the position of director is considered income from employment pursuant to Article 17.2.e) of the LIRPF. Therefore, the entirety of the remuneration received for such functions cannot benefit from the exemption for work performed abroad.

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