17. Work income received for work actually carried out abroad, with a limit of 60,100 euros per year
Regulations: Articles 7.p) Law IRPF and 6 Regulation IRPF
Requirements
from work actually performed abroad is exempt when the following requirements met:
a) That the work is carried out for a company or entity not resident in Spain or a permanent establishment located abroad .
In particular, when the entity receiving the work is linked to the entity that employs the worker or to the entity in which the worker provides his or her services, it will be understood that the work has been carried out for the non-resident entity when, in accordance with the provisions of article 18.5 of the LIS it can be considered that an intra-group service has been provided to the non-resident entity because the aforementioned service produces or may produce an advantage or utility for the recipient entity.
Note: For the application of this exemption to income obtained abroad by officials posted to international organizations, see Supreme Court ruling No. 428/2019, of March 28 ( RED : STS 1056/2019).
b) That in the territory where the work is carried out, a tax of an identical or analogous nature to that of IRPF is applied and it is not a country or territory classified by regulation as a tax haven (currently, non-cooperative jurisdiction).
This requirement is considered to be met when the country or territory in which the work is carried out has signed an agreement with Spain to avoid international double taxation that contains an information exchange clause. For the rest of the countries (with which there is no Agreement), it will be necessary to be aware of the existence of an identical or similar tax.
You can access the list of Double Taxation Agreements signed by Spain on the AEAT website: https://sede.agenciatributaria.gob.es .
Note: Although article 7.p) of the Personal Income Tax Law expressly refers to "tax havens", it must be taken into account that, according to the new Tenth Additional Provision of Law 36/2006, of November 29, on measures for the prevention of tax fraud, all references made in the Personal Income Tax regulations to tax havens, countries or territories with which there is no effective exchange of information, or with zero or low taxation will be understood to be made to the definition of non-cooperative jurisdiction established by the First Additional Provision of the aforementioned Law 36/2006, in its wording in force as of July 11, 2021, and which is discussed in chapter 10 of this manual.
The second transitional provision of Law 36/2006, of November 29, on measures for the prevention of tax fraud establishes that as long as the countries or territories that are considered non-cooperative jurisdictions are not determined by Ministerial Order, the countries or territories provided for in Royal Decree 1080/1991 will have such consideration.
Well, although Order HFP /115/2023, of February 9, has been approved, which determines the countries and territories, as well as the harmful tax regimes, that are considered non-cooperative jurisdictions ( BOE of February 10), which updates the list of countries and territories that appear in Royal Decree 1080/1991, of July 5, it is not applicable in the IRPF until the year 2024, so during this year 2023 the countries or territories provided for in Royal Decree 1080/1991 continue to be considered non-cooperative jurisdictions.
See the list of countries and territories classified by regulation as tax havens and the notes on the aforementioned list of countries and territories that appear in Chapter 10 of this Manual.
Quantification of the exempt amount
The exemption will have a maximum limit of 60,100 euros per year.
In order to calculate the remuneration corresponding to work performed abroad, the days that the worker has actually been posted abroad must be taken into account, as well as the specific remuneration corresponding to services provided abroad.
For these purposes, the Supreme Court Ruling No. 274/2021, of February 25, 2021, issued in appeal for cassation number 1990/2019 ( ROJ : STS 607/2021), has established as an interpretative criterion that the days of travel to the country of destination or return to Spain must be understood to be included in the calculation of the amount of the exemption.
To calculate the amount of income earned each day for work performed abroad, apart from the specific remuneration corresponding to said work, a proportional distribution criterion will be applied taking into account the total number of days in the year.
Incompatibility with the excess regime
Finally, this exemption is incompatible, for taxpayers posted abroad, with the regime of excesses excluded from taxation for remuneration received by employees of companies and civil servants posted abroad provided for in article 9.A.3.b) of the Personal Income Tax Regulations, whatever their amount. The taxpayer may choose to apply the excess regime instead of this exemption.
Unlike the excess regime of article 9.A.3.b) of the Personal Income Tax Regulations, the amounts received for travel and accommodation to which the general regime of allowances exempt from taxation of article 9.A.3.a) of the Personal Income Tax Regulations applies are compatible with the exemption for work performed abroad.
Example :
Mr. JLM He was sent by his company from April 1 to June 30, 2023 to a company located in Canada to participate in a project consisting of the engineering, supply, construction and start-up of a new base refinery for the production of clean fuels. Once this work was done, Mr. JLM He returned to Spain, continuing in the company under his normal work and salary regime.
As specific remuneration for services rendered abroad, Mr. JLM received the amount of 15,200 euros.
In addition, to cover travel and subsistence expenses during his stay in Canada, the company purchased and paid for his plane tickets and paid him 80 euros per day for subsistence expenses during the three months he provided his services to the Canadian company.
Determine the amount exempt from remuneration corresponding to work performed abroad, knowing that the annual salary received from the company amounts to 75,000 euros.
Solution:
Since the requirements established by the Personal Income Tax regulations are met, according to the data in the example, the exemption must be applied, the quantification of which is carried out as follows:
a) Remuneration earned during days spent abroad:
- Corresponding to the salary: (75,000 ÷ 365) x 91 = 18,698.63
- Corresponding to services provided abroad (*) = 15,200
- Total (18,698.63 + 15,200) = 33,898.63
(*) Airline tickets and daily living expenses are exempt because they do not exceed the legal limit. See the section on exempt travel allowances and subsistence allowances in Chapter 3 of this Manual. (Back)
b) Amount of the exemption: (18,698.63 + 15,200) = 33,898.63 (**)
(**) This amount falls within the maximum annual exemption limit of 60,100.00 euros