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Practical manual for Income Tax 2023.

1. Exemptions on work income

• Diets

Regulations: Articles 17.1.d) Law IRPF and 9 Regulation IRPF

Diets and allowances for travel expenses exempt from taxation.

See the section on " Tax Consideration of Travel Allowances and Subsistence Allowances " in Chapter 3 of this Manual.

• Exempt work income in kind

Income in kind that, in accordance with article 42.3 of the Tax Law, is considered exempt income from work.

See the section on " Exempt income from work in kind " in Chapter 3 of this Manual.

• Work performance of crew members of Canary Islands vessels

Regulations: Arts 73.2 and 3; 75.1 and 3 Law 19/1994, of July 6, amending the Economic and Fiscal Regime of the Canary Islands ( BOE of July 7).

50 percent of the gross income from personal work earned during navigation by crew members of ships registered in the Special Registry of Ships and Shipping Companies of the Canary Islands and of ships assigned to regular services between the Canary Islands and between these and the rest of the national territory is exempt, provided that said crew members are taxpayers of IRPF .

In the case of vessels engaged in regular passenger services between ports in the European Union, the above exemption will only apply to crew members who are nationals of a Member State of the European Union or of one of the States Parties to the Agreement on the European Economic Area.

Likewise, from January 1, 2021, this incentive is also applicable to crew members, taxpayers of IRPF , of ships of shipping companies registered in the Special Register of Ships and Shipping Companies that were registered in another Member State of the European Union or the European Economic Area, because in these cases, in order to adapt the Special Register of Ships and Shipping Companies to the Community Guidelines on aid provided to maritime transport, contained in Communication C (2004) 43 of the European Commission, it has been established that said ships are considered registered in the Special Register, provided that they comply with the same requirements and conditions as those registered.

Note: the application of the exemption for “Income from work of crew members of certain fishing vessels”, included the Forty-first Additional Provision of the Income Tax Law, is subject to its compatibility with Community legislation, a circumstance that implies that it must be approved by the European Union. Since this fact has not yet occurred, it is not applicable in 2023.

• Employment income received from the International Organization of Securities Commissions

Regulations: Third Additional Provision Law 55/1999, of December 29, on fiscal, administrative and social order measures ( BOE of December 30)

The income from work received by the International Organization of Securities Commissions, in its capacity as a public benefit association, by the General Secretary, management staff and employees who carry out an activity directly related to the statutory purpose of the organization, is exempt.

• Perceived work performance from the International Public Oversight Board on Auditing Standards, Professional Ethics

Regulations: Second Additional Provision of Law 4/2006, of March 29 ( BOE of March 30)

Income from work received by the International Public Oversight Board on auditing standards, professional ethics and related matters received by the Secretary General, management staff and staff who perform an activity directly related to its statutory purpose are exempt.

This exemption is not applicable when the natural persons to whom it refers have Spanish nationality or had their residence in Spanish territory prior to the commencement of the related activity on the Board.

• Income from work derived directly or indirectly from shares, stocks or other rights, which grant special economic rights

Regulations: Additional Provision Fifty-Third Law IRPF

As of January 1, 2023, 50% of the income from work obtained by the administrators, managers or employees of venture capital entities and funds listed in section 2 of the aforementioned Additional Provision Fifty-third of the Income Tax Law is exempt from , as well as their managing entities or entities in their group, provided that the following requirements are met:

  1. The special economic rights of said shares, stocks or rights are conditional on the remaining investors in the entity or fund referred to in the previous section obtaining a minimum return defined in the regulations or statutes of the same.

  2. The shares, stocks or rights are held for a minimum period of five years, unless

    • its transmission occurs mortis causa

    • are settled early 

    • become ineffective

    • are lost in whole or in part as a result of the change of managing entity.

    In these cases, the shares, stocks or rights must have been held uninterruptedly until such circumstances occur.

Regarding the form of taxation of the other 50% of said employment income, see the corresponding section contained in Chapter 3.