Lucía is a telecoms engineer. She lives in Madrid and works for a Spanish company with a subsidiary in Mexico. In 2026 her gross salary is 73,000 euros. Between March and July she spends 110 days in Monterrey rolling out a network for the Mexican subsidiary, which is the business that uses and benefits from that work. She also receives a specific posting supplement of 6,000 euros. Nobody at her company has told her that part of this may be exempt on her Spanish return. It may well be, and the sums are not small.
The exemption is in article 7.p of the Spanish Personal Income Tax Act (IRPF) and is developed in article 6 of its Regulation. It removes from tax the employment income earned for work actually performed abroad, up to an annual cap. It is one of the exemptions most often forgotten on the return, and one of those most often reviewed afterwards.
The conditions, one at a time
The law sets three requirements, and all three must be met.
| Requirement | What the rule says | How it is proved in practice |
|---|---|---|
| Physical work abroad | Work "actually performed abroad" | Tickets, boarding passes, hotel bills, travel orders |
| A non-resident recipient | For a company or entity not resident in Spain, or a permanent establishment located abroad | Contract, engagement letter, intra-group invoicing |
| A country with a comparable tax | That country applies a tax identical or similar to IRPF and is not a tax haven; met automatically if there is a treaty with an exchange of information clause | The treaty text as published in the Spanish Official Gazette |
On top of that there is a cap: the exemption covers at most 60,100 euros a year.
Who must benefit from the work
This is the requirement that causes most disputes. Being abroad is not enough: the work must be done for a non-resident entity or a permanent establishment abroad. Where that entity is related to the employer, as Lucía's Mexican subsidiary is, the rule requires that it can be treated as an intra-group service because it produces, or may produce, an advantage or benefit for the recipient. What counts is who gets the benefit of the work, not who runs the payroll.
In practice, working remotely from abroad for a Spanish employer, on tasks that only serve that employer, does not qualify: the work is abroad, but the recipient is in Spain. Nor do sales trips to sell the Spanish company's products, where the business benefiting from the work is that same company.
What about tax in the other country
The rule requires that the territory applies a tax of a similar nature, not that the employee has actually paid it. If the country has a double taxation treaty with Spain containing an exchange of information clause, the requirement is treated as met without further proof. That has to be checked in the specific treaty. If the country is a tax haven, the exemption is not available.
Whether the other country actually taxes the salary is a matter of its own law and of the treaty, which the employee's adviser there has to confirm. What is Spanish law is this: the part exempt in Spain is not in the tax base, so it cannot also generate a foreign tax credit. That credit, for the non-exempt part, is explained in our guide to article 80.
The day-count method in article 6 of the Regulation
The exemption does not apply to the whole salary, only to what is earned during the days spent abroad. The Regulation has two parts:
- Specific pay for the work abroad, such as a posting supplement: included in full, because it exists only because of that work.
- The rest of the salary: spread in proportion to the total number of days in the year, taking the days the employee was actually posted abroad.
Applied to Lucía, with no allowances or other items:
- Ordinary salary: 73,000 euros. Days in the year: 365. Daily salary: 73,000 / 365 = 200 euros.
- Days abroad: 110. Proportional share: 110 × 200 = 22,000 euros.
- Specific posting supplement: 6,000 euros, in full.
- Total attributable to the work abroad: 28,000 euros.
- Against the cap: 28,000 is below 60,100, so all of it is exempt.
- Taxable employment income: 79,000 − 28,000 = 51,000 euros.
The saving depends on each taxpayer's marginal rate, which varies by region. Purely as an illustration, if the 28,000 exempt euros came out of a 37% band, the saving would be about 10,360 euros. That is not a final figure: the real tax is worked out on the complete return.
The cap bites on high salaries. If an executive on an ordinary salary of 200,000 euros spends 150 days abroad working for foreign subsidiaries, the proportional share is 200,000 / 365 × 150 = 82,191.78 euros, but only 60,100 is exempt; the remaining 22,091.78 is taxed normally.
| Case | Ordinary salary | Days abroad | Proportional share | Exempt |
|---|---|---|---|---|
| Lucía (plus 6,000 specific) | 73,000 | 110 | 22,000 | 28,000 |
| Executive | 200,000 | 150 | 82,191.78 | 60,100 |
Exactly which days count, such as outbound and return travel days, is examined case by case against the paperwork. What is expected of the taxpayer is to be able to prove every day claimed as worked abroad.
The "excess pay" regime: one or the other
There is a similar-looking rule that is not the same thing: the excess pay regime in article 9.A.3.b of the Regulation. For employees of companies posted abroad, it leaves untaxed the extra they receive over what they would earn in the same post if they were based in Spain.
The law is categorical: for taxpayers posted abroad, the 7.p exemption is incompatible with the excess pay regime, whatever the amount. They cannot be added together. The taxpayer may choose the excess pay regime instead of the exemption.
| 7.p exemption | Excess pay regime | |
|---|---|---|
| What goes untaxed | Pay earned for days abroad, plus specific pay | The extra pay for being posted abroad |
| Cap | 60,100 euros a year | No fixed euro cap; measured against the reference salary in Spain |
| Who receives the work | Must be a non-resident entity or an establishment abroad | No such requirement |
For short postings the exemption usually fits better; for expatriates on a high and stable package, it is worth running both sets of numbers before choosing.
Why it does not stack with Beckham
Anyone under the special regime in article 93, known as the Beckham regime, is not taxed under the general IRPF rules but under those of non-resident income tax, with the regime's own adjustments. One of them is that all employment income earned while the regime applies is deemed to be earned in Spain. With no income "from abroad", there is nothing to exempt: the tax is worked out under the article 93 rules, not with the exemptions in article 7 of the IRPF Act.
For someone who travels a lot, the question is not how to combine the two, but which one suits them better overall, bearing in mind that Beckham has to be elected within a deadline and runs for several years. We explain it on our Beckham regime page and, for company shares, in our guide to stock options and RSUs under article 93.
An exemption that gets reviewed. The fact that the employer did not apply the exemption to withholding does not prevent you from claiming it on the return; but if you claim it, you must be able to prove all three requirements and the days. The tax authority commonly asks for the travel documents and evidence of the benefit to the foreign entity. Without that proof the exemption is lost and the tax is reassessed with interest. We do not guarantee that it will be accepted; what we do is not claim it without the papers to back it.
Who it does not reach
The exemption belongs to IRPF and covers only employment income. That rules out two profiles who often ask about it:
- The self-employed person providing services abroad. Their income is business income, not employment income, even if they travel to serve foreign clients. Their international position is dealt with differently, as we describe on our international self-employed page.
- Someone who is no longer resident in Spain. If the posting is so long that residence ends, the salary leaves IRPF and the exemption has nothing to bite on. What matters then is where you reside, and sometimes the exit tax if there is a large portfolio, as explained in our guide to the exit tax.
Earlier years
If you have already worked abroad in earlier years without applying the exemption, you can ask for those returns to be corrected as long as the right to a refund has not become time-barred, with the same evidence of requirements and days. The general rules on that time limit are in our guide to the four-year limitation period.
What we need to look at it
Your annual withholding certificate, the payslip breakdown showing any specific posting items, a calendar of days abroad with supporting evidence, and whatever shows who the work was for: engagement letter, intra-group contract or invoicing. With that we check the requirements, calculate the exempt part and compare it with the excess pay regime, or with Beckham where relevant. The starting point is our form for posted workers. We study every case with care, but the final decision lies with the tax authority and we do not guarantee the outcome.
This guide fits with what we explain about the exit tax when you leave Spain, relief for tax already paid abroad, controlled foreign company rules and how Spain looks at a trust.