Doctrine by topic · DGT Observatory

Exempt Income with Progressivity: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Stable position High confidence 10 rulings · 2015–2026

Current position

Exempt income is not considered exempt income with progressivity unless the specific regulations of the exemption expressly provide that it must be included to calculate the average tax rate. In the case of pensions derived from international treaties, if the taxing power lies with the State of origin, the income must be declared in Spain as exempt with progressivity. Employment income exempt under Article 7 of the LIRPF (Personal Income Tax Law), such as meal vouchers, does not have this status.

The DGT maintains a clear distinction between exemptions under the LIRPF, which are not exempt with progressivity, and those derived from international treaties, which are. The position is consistent: the nature of the exemption (whether by domestic law or by treaty) determines whether the income affects the calculation of the average tax rate. No change in criterion is observed, but rather the application of different rules depending on the origin of the exemption.

Turning points

  1. V2460-21

    Establishes that UK pensions for British nationals are considered exempt income with progressivity in Spain.

  2. V0790-23

    Confirms that pensions from a State under the treaty with Italy, as they are not taxed in Spain, must be included to calculate the average tax rate.

Analysis based on 10 of 10 rulings with a stated position. Updated 28 September 2026.

Rulings on this topic

10
V0269-26 9 Feb 2026

Tax declaration obligation depends on exceeding income thresholds

SG de Impuestos sobre la Renta de las Personas Físicas
rentas exentas con progresividadlímite de obligación de declararconvenio de doble imposiciónrendimientos del trabajorendimientos del capital mobiliario LIRPF — Ley 35/2006 del IRPF art. 96.2LIRPF — Ley 35/2006 del IRPF art. 96.3.a
Affects CompanyExpat · Non-residentIndividual
V0738-23 28 Mar 2023

UK public sector pensions may be tax-exempt in Spain under treaty

SG de Impuestos sobre la Renta de las Personas Físicas
rentas exentas con progresividaddoble imposiciónpensión de trabajador públicoresidencia fiscalconvenio de doble imposición LIRPF — Ley 35/2006 del IRPF art. disposición adicional vigésimaConvenio entre España y Reino Unido
Affects CompanyExpat · Non-residentIndividual
V2460-21 29 Sept 2021

UK public pensions taxed in Spain if beneficiary is Spanish national

SG de Impuestos sobre la Renta de las Personas Físicas
pensiones públicasresidencia fiscalrentas exentas con progresividaddoble imposiciónrendimientos del trabajo LIRPF — Ley 35/2006 del IRPF art. 2LIRPF — Ley 35/2006 del IRPF art. 5
Affects CompanyExpat · Non-residentIndividual
V2605-15 8 Sept 2015

Earnings from foreign work not counted in progressive tax rate calculation

SG de Impuestos sobre la Renta de las Personas Físicas
rentas exentas con progresividadrendimientos del trabajotipo de gravamenexenciónbase liquidable LIRPF — Ley 35/2006 del IRPF art. 7.pLIRPF — Ley 35/2006 del IRPF art. Disposición adicional vigésima
Affects CompanyExpat · Non-residentIndividual

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