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Practical Guide to Income Tax 2025. Part 1.

a) Concept

Amounts received by the employee or worker in the form of per diem and travel expense allowances intended to offset normal food and lodging expenses in restaurants, hotels and other hospitality establishments, incurred for expenses in a municipality other than the recipient's usual place of work and residence, are exempt from tax and, therefore, will not have to be included among the gross income from work.

The expression “travel to a municipality other than the usual place of work” must be interpreted to mean that the worker must be assigned to a workplace and leave or travel outside of it to perform his work at another workplace.

Application of the allowance regime of Article 9 of the Regulation to directors and members of the Board of Directors

The aforementioned regime is only applicable to employment or statutory relationships in which the characteristics of dependence, otherness and alienation are present. Directors or members of the Board of Directors shall not be entitled to apply the regime provided for in Article 9 of the Regulation for the allowances they receive in consideration of the performance of the tasks that correspond to them as such, that is, by virtue of said commercial relationship, although they may, however, apply said regime to those allowances that were imposed by their employment relationship with the company. To that end, the origin or cause of the allowances must be analyzed, taking into account the income paid independently due to his status as Administrator and as an employee of the Company. See the Resolution of the Central Economic-Administrative Court (TEAC), of January 30, 2025, Claim number 00-01475-2024, issued in an extraordinary appeal for the unification of criteria. It reiterates the criterion set in Claim number 00-08517-2022.

In the case of travel and stay for a continuous period of more than nine months in the same municipality, said allowances will not be exempt from taxation. For these purposes, time spent on vacation, illness or other circumstances that do not imply a change of destination in the same municipality will not be discounted.

Clarifications for the purposes of the provisions of Article 9.A.3) of the Personal Income Tax Regulations

  • Regarding the displacement: In order for travel allowances to no longer be exempt from taxation, Article 9.A.3) of the Personal Income Tax Regulations requires that the travel be carried out continuously, without interruption, and that the travel be maintained for a period of more than nine months, regardless of the activity carried out and its characteristics. Criterion established by the Supreme Court in Judgment No. 229/2022, of February 23 ( ROJ : STS 668/2022).

  • Regarding its accreditation: The amounts paid for subsistence expenses on trips with or without overnight stays within Spanish territory or abroad, to municipalities other than the usual place of work of the recipient and the one that constitutes his residence, do not need proof as to their amount, in reference to the quantitative limits indicated in said precept, for their consideration as allowances for normal subsistence expenses exempt from tax, without prejudice to the proof by the payer of the day and place of the trip, as well as its reason or motive.

  • Acceptable supporting documents: With reference to the amounts that are considered allowances for normal expenses of maintenance and stay in hotels, restaurants and other hospitality establishments, for cases in which overnight stay is in a different municipality, the Personal Income Tax Regulations consider the expenses of stay to be exempt from taxation for the amounts that are justified. For these purposes, the only acceptable supporting documents are those corresponding to stays in hotels and other hospitality establishments, and amounts intended for the rental or lease of a home cannot be considered as such.