The tax benefits applicable to international business travel are once again a point of interest. During the last two years, we have experienced an almost complete standstill in international business travel. But, these are slowly being reactivated.
Although technology brings us closer and closer to clients and colleagues, in the case of teleworking, certain situations require the presence of certain professional profiles.
Tax benefits applicable to international business travel
We have to distinguish between tax-exempt expenses, the supplement for destination or the exemption for work carried out abroad.
Therefore, companies must be clear about the differences between these concepts and when to apply them. Or why not, when one or the other is more advantageous.
All this, with the purpose of optimizing the employee’s taxation. Or even that of the company in cases where the international assignment is carried out under the so-called “tax equalization”.
In our experience, it is very important for companies to have comprehensive insurance coverage. Both health and, if necessary, travel insurance for family members and repatriation of the employee in case of accident or illness. Not having it, can lead to the company having to incur costly expenses.
The following is a brief summary of the implications of each of these exemptions provided for in the Law.
Tax-exempt expenses
These amounts refer to additional expenses incurred when an employee is required to work away from his or her usual place of work. Specifically, when international movements take place.
The following expenses and amounts will not be subject to taxation in Spain.
Firstly, the justified cost of locomotion expenses if public transport is used. Or 0.19€/kilometer in the case of the use of a private vehicle.
Also, the cost of accommodation, for the amounts that are justified.
Finally, living expenses up to €48.08 if the trip is outside Spain. This is increased to €91.35 if the stay is abroad.
In relation to this type of subsistence allowance it is important to bear in mind that there is a time limit. They cannot be applied for more than 9 continuous months. Regardless of the fact that there may be a change of fiscal year.
Supplement for destination
The amounts received by the employees of companies with destination abroad and which are considered an excess over what would be their usual salary if they had remained in Spain are exempt from taxation.
At this point, it is important to point out that it is understood that there is a destination when there is a change in the employee’s place of work. And the employee moves to a foreign country.
Exemption for work carried out abroad (7.p)
The first thing to mention is that this exemption is incompatible with the assignment allowance. Therefore, both exemptions cannot be applied during the same tax year.
However, this exemption can be combined with the allowances described in the first section.
This exemption allows to leave out of taxation, up to a maximum of 60,100€ per year. This amount, in concept of salary and other remuneration derived from work, whether usual or additional.
In order to do so, they must be received for work physically carried out abroad. For the benefit of a non-resident entity. And as long as the country where the services are performed is not a tax haven and has in force a tax analogous to the Spanish one.
In the case of internationally mobile workers, it is important to assess which of the above exemptions may be more advantageous.
