Spanish tax benefits for pilots

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Pilots in the broadest sense

People resident in Spain having an employment relationship with a company not resident in Spain could enjoy an exemption of up to €60,100. Most commonly referred to as Spanish tax benefits for pilots, as these professionals seem to use this regime the most. The exemption and its conditions were confirmed in the binding consultation issued by the tax authorities. The authorities issued the consultation in respect of a professional motor cyclist (in Spanish also a “piloto” or pilot).

Employment relationship

In the binding consultation, the Spanish General Directorate of Taxes (the “DGT”) rules out the application of the exemption of article 7p of the IRPF Law for work done abroad when there is no employment relationship. The income tax or IRPF Law establishes an applicable exemption on the income obtained from work made abroad in article 7.p of the IRPF Law. In the event of analyzed fact, the DGT analyzes whether the aforementioned exemption is applicable to a professional motor cyclist (a “pilot”), a tax resident in Spain, who has signed numerous sponsorship contracts with multiple entities (some of them foreign). Specifically, in some of these contracts with foreign entities (the sponsors) they require the provision of a specific service abroad consisting of brand promotion of such sponsors. The DGT analyzes the possible application of the exemption to income received from foreign sponsors and concludes that it is not to the extent that there is no employment relationship between the pilot and sponsor entity. The DGT considers, therefore, that the exemption of article 7.p) of the IRPF Law is applicable exclusively to income from work derived from a labor, statutory or labor of a special nature, but not to a commercial relationship.

Further Conditions and Contact

There are further conditions in addition to the employment relationship before the exemption applies. If you would like to understand more about this and if it could apply in your case, please do contact us at 0034 610 739 364 and or info@businessadvicespain.com