IRPF Article 7p Exemption: How to Apply It Safely

Does your company have employees who travel abroad? Then you should be familiar with Article 7p of the Spanish Personal Income Tax (IRPF). This tax benefit allows income earned from work performed outside Spain to be exempt from taxation, up to a limit of €60,100 per year.

However, its application is not automatic. It requires meeting specific conditions, properly documenting assignments, and, above all, having a clear and up-to-date policy in place.

At Adlanter, we help companies apply this exemption safely, efficiently, and in full compliance with current regulations. In this article, we explain how it works, which mistakes to avoid, and how to turn it into a competitive advantage.

What is the IRPF exemption under Article 7p?

Article 7p of the Spanish Personal Income Tax Law (Law 35/2006) allows Spanish tax residents to be exempt from taxation on income earned for work performed abroad, provided that the following requirements are met:

• The work must be carried out physically outside of Spain.
• The recipient of the work must be a foreign entity (even if it belongs to the same group).
• The destination country must have a tax system similar to IRPF and must not be listed as a non-cooperative jurisdiction.
• The employee must be a Spanish tax resident (over 183 days per year).
• The exemption limit is €60,100 per year.

You can find more information about the requirements here.

Why is it so relevant for companies?

According to Mercer’s 2025 study on international mobility, 91% of Spanish companies have employees who travel internationally. However, many do not apply the 7p exemption correctly.

How is Article 7p applied in practice?

There are two possible ways:

Payroll application

The company calculates and applies the exemption monthly, deducting the exempt IRPF days directly from the employee’s payslip.

Application through the income tax return

The employee claims the exemption in their annual tax return, providing the required documentation. This route is more complex and may lead to requests for additional information from the tax authority.

Practical example: applying Article 7p through payroll

Let’s imagine an employee with an annual gross salary of €60,000 who worked 22 days in Colombia for a group subsidiary. The company applies the 7p exemption directly through payroll.

Benefit calculation:

• Daily salary: €60,000 / 365 = €164.38
• Exempt days: 22
• Total exempt: €164.38 × 22 = €3,616.36

Impact on payroll:

• In the month the exemption is applied, the IRPF withholding is proportionally reduced.
• The employee sees a net increase in their salary that month, with no additional cost for the company.
• The company reports the exempt amount correctly to the tax authority, avoiding discrepancies in the employee’s tax return.

This type of application requires coordination between the mobility, tax, and payroll departments — and above all, a clear and updated internal policy.

What are the risks of incorrect application?

• Requests for information from the tax authority due to inconsistencies between the company and employee declarations.
• Loss of the tax benefit due to lack of documentation.
• Penalties for non-compliance with regulations.
• Frustration from the employee due to a lack of clarity or support.

How can Adlanter help?

At Adlanter, we support companies throughout the entire process of applying the IRPF Article 7p exemption — from initial diagnosis to full operational implementation. We assess current compliance, identify risks and opportunities, and design clear internal policies tailored to your organization’s reality. We review each case individually, coordinate with tax, payroll, and mobility teams, and prepare all the necessary documentation to justify the exemption before the tax authority. We also train internal teams and help automate the control of business travel and exempt days using digital tools.

Our approach combines technical expertise, strategic insight, and practical solutions so your company stays compliant and makes the most of this tax benefit. If you want to apply Article 7p with confidence and ease, get in touch now and learn more about our expatriate management services.