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V3217-14 1 December 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por trabajos en el extranjero

Exemption for foreign work applies if recipient is non-resident and country has double taxation treaty

A Spanish resident worker deployed to Mexico by a German agency asks whether the foreign work exemption applies and if there are reductions for exceeding the exemption limit. The DGT states that the exemption requires the recipient entity to be non-resident and the country to have a double taxation treaty with Spain, and that no reductions are available for exceeding the exemption threshold.

The question raised

Whether it is possible to avail of the exemption provided for in letter p) of Article 7 of the Personal Income Tax Law. If so, whether any reduction is applicable to income exceeding the limit of 60,100 euros.

The DGT's ruling

The exemption under Article 7(p) of the Personal Income Tax Law requires that the work be performed for a non-resident entity or a permanent establishment abroad and that the country has an analogous tax and an information exchange agreement with Spain. Compliance with the latter requirement does not require that the income has been effectively taxed in the destination country. There is no special reduction for income exceeding the exempt limit of 60,100 euros.

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