{"id":18124,"date":"2025-03-06T10:00:11","date_gmt":"2025-03-06T09:00:11","guid":{"rendered":"https:\/\/www.uhy-fay.com\/?p=18124"},"modified":"2025-03-06T10:13:05","modified_gmt":"2025-03-06T09:13:05","slug":"tax-exemption-7p-how-to-save-up-to-e60100-in-taxes-while-working-abroad","status":"publish","type":"post","link":"https:\/\/www.uhy-fay.com\/en\/blog\/tax-exemption-7p-how-to-save-up-to-e60100-in-taxes-while-working-abroad\/","title":{"rendered":"Tax Exemption “7p)”: How to Save Up to \u20ac60,100 in Taxes While Working Abroad"},"content":{"rendered":"

While the famous Beckham Law<\/a> is widely recognized for offering tax benefits to those moving to Spain for work reasons, its lesser-known counterpart, the “7p”, deserves equal attention. This exemption is designed for tax residents in Spain who receive part of their salary for work carried out in other countries.<\/p>\n

What is the 7p)?<\/strong><\/p>\n

It is a tax exemption regime that allows Spanish workers performing tasks abroad to enjoy a tax exemption on that part of their income. This measure was implemented to encourage the internationalization of Spanish companies and technologies, thus improving the competitiveness of the national business sector.<\/p>\n

Key Benefits:<\/strong><\/p>\n

Direct Savings:<\/strong> Income derived from work abroad is not subject to taxes in Spain, increasing employees’ net salary.<\/p>\n

Incentive for International Mobility:<\/strong> It makes it easier for employees to work globally without worrying about the tax burden in their home country.<\/p>\n

Requirements for its Application<\/strong><\/p>\n

To benefit from this regime, workers must meet certain criteria:<\/p>\n

Actual Work Abroad:<\/strong> There must be a physical relocation abroad to perform the work.<\/p>\n

Work for a Non-Resident Entity:<\/strong> These jobs must be for a company not resident in Spain and must directly or indirectly benefit this entity. In the case of working for Group companies, a proper transfer pricing policy is required.<\/p>\n

Income Qualified as Employment Income:<\/strong> The income must be considered employment income according to the Spanish Personal Income Tax (IRPF). This includes executives or directors working in foreign subsidiaries. In the case of directors, there has been considerable controversy, but the Supreme Court has finally admitted its application in these cases.<\/p>\n

Taxes in the Country of Work:<\/strong> The country where the work is performed must have a tax similar to the Spanish IRPF and must not be a tax haven. This is usually validated if the country has a double taxation agreement with Spain that includes information exchange.<\/p>\n

Limits and Composition of the Exempt Income<\/strong><\/p>\n

Exempt Limit:<\/strong> 60,100 euros per year.<\/p>\n

Types of Compensation:<\/strong><\/p>\n

Specific:<\/strong> Payments for work specifically performed abroad.<\/p>\n

Non-Specific:<\/strong> Income generated during the days the taxpayer is displaced outside Spain.<\/p>\n

Knowing and taking advantage of the benefits of Article 7p can be a great advantage for those Spanish workers who cross labor borders, ensuring a fairer and more motivating economic return.<\/p>\n

It is also beneficial for companies that need to incentivize their employees for international assignments, as it results in a salary increase for the employee without increasing the company\u2019s costs.<\/p>\n

A proper transfer pricing policy is advisable in these cases to avoid conflicts with the tax administration, as it requires the cost of the employee to be assumed by the foreign company receiving the work and also ensures that the work provides a benefit or utility to that foreign company.<\/p>\n

At UHY Fay & Co, we have a team of international taxation<\/a> experts who can help your company design an appropriate compensation policy for international mobility.<\/p>\n

For more information, contact us.<\/p>\n

\"\"
\nPitu Domecq
\n<\/b>Partner Tax & Legal
\nidp@uhy-fay.com<\/p>\n","protected":false},"excerpt":{"rendered":"

While the famous Beckham Law is widely recognized for offering tax benefits to those moving to Spain for work reasons, its lesser-known counterpart, the “7p”, deserves equal attention. This exemption is designed for tax residents in Spain who receive part of their salary for work carried out in other countries. What is the 7p)? It…<\/p>\n","protected":false},"author":5,"featured_media":18141,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[50],"tags":[111,112,113],"class_list":["post-18124","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fiscal-news","tag-council-of-ministers","tag-working-hours","tag-draft-bill-for-the-reduction-of-working-hours"],"yoast_head":"\nTax Exemption "7p)": How to Save Up to \u20ac60,100 in Taxes | UHY Fay & Co<\/title>\n<meta name=\"description\" content=\"This exemption ( "7p)") is designed for tax residents in Spain who receive part of their salary for work carried out in other countries.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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