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V3238-15 22 October 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Exemption for work performed abroad is not applicable if the representative office does not constitute a permanent establishment

A civil servant from an Autonomous Community stationed in Brussels has enquired whether she can apply for the exemption for income from work performed abroad. The Directorate General for Taxes (DGT) has ruled that this is not applicable because the representative office does not constitute a permanent establishment located abroad.

The question raised

Application of the exemption provided for in letter p) of Article 7 of the Personal Income Tax Law.

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 non-resident entity or a permanent establishment abroad. The representative office of an Autonomous Community abroad is not considered a permanent establishment, as the latter requires the taxpayer to derive income from economic activities or operations from said location. As this requirement is not met, the exemption is not applicable.

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