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V3370-15 2 November 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Requirements for exemption of income from work performed abroad

A foundation inquired whether its employees seconded abroad could apply for the exemption under Article 7.p) of the Personal Income Tax Act (LIRPF). The Directorate General for Taxes (DGT) ruled that the exemption depends on the work being effectively performed outside Spain, for a non-resident entity, and in a country with an analogous tax system or an information exchange agreement.

The question raised

Question posed In relation to the members of the applicant's staff who are seconded abroad, the application of the exemption provided for in letter p) of Article 7 of the Personal Income Tax Law, and the calculation of the exempt income.

The DGT's ruling

To apply the exemption, the work must be effectively performed abroad and for a non-resident entity or permanent establishment. This requirement is considered met when the foundation executes an awarded project whose beneficiary is the Administration of the foreign country. The exemption does not apply if the assignments are for fundraising or promoting the foundation, as these are considered to be in its own interest. The maximum limit of the exemption is 60,100 euros per year, including specific remuneration and the proportional calculation of non-specific remuneration based on the days of stay.

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