Pilots – living in Spain and claiming the 60.100€ income exemption


We receive many enquiries from pilots and cabin crew who have heard about this income tax exemption (see this article) but are confused about whether it applies to them. This article should answer most of their questions.

As explained in the linked article, a pilot who is tax resident in Spain but works in other countries, is entitled to deduct up to 60.100€ in the case that the following applies (brief summary):

  1. The airline employer is not established in Spain. This also means that the contract of employment is not subject to Spanish law.
  2. The work done by the pilot is not performed in Spain.
  3. The airline employer is based in a country that has a tax treaty with Spain and, failing this, has a ‘normal’ income tax system.

The first issue to analyse is whether the pilot is tax resident in Spain. This article goes into detail about what makes a person tax resident but, generally speaking, a pilot whose only home is in Spain or whose family (spouse and/or children) live in Spain, would almost certainly be considered tax resident in Spain.

The 60.100€ exemption works as a deduction from taxable income. Here are a few examples to illustrate the effect of the exemption::

  • A pilot living in Spain receives a salary, bonuses etc that total 75.000€ in the calendar year (the Spanish tax year). The pilot is married with two young children. We deduct 60.100€ from the 75.000€ producing taxable income of 14.900€ and then apply personal and family dependants tax free allowances. Zero income tax is payable.
  • A pilot living in Spain receives a salary of 75.000€ and also receives rental income of 15.000€ p.a. from a flat he owns in Oslo, where he used to live. He is not married and has no dependants. The salary is reduced to 14.900€ after applying the exemption. The rental income is reduced by a 60% deduction as the flat is rented as a home. After all the deductions and personal allowances are applied total income tax to pay is 2.800€.

Examples of when the exemption applies, and when it doesn’t:

  • Pilot works for a European airline that has a base in Thailand and the employment contract is with the Thailand operating company. All the flights start and end outside of Spain. Exemption applies because Thailand has a tax treaty with Spain and all work is performed outside of Spain.
  • Pilot flies internationally and works for an airline that has an establishment in Spain, with which the pilot has an employment contract: Exemption does not apply because employer is regarded as Spanish.
  • Cabin crew works for an airline based in the UK but flights do not commence nor end in Spain. The exemption applies as the UK has a tax treaty in Spain and work is performed outside of Spain.
  • Pilot works for private airline based in the Isle of Man. Exemption does not apply because the employer is based in a listed tax haven. Here is a list of all listed tax havens.
  • Cabin crew is contracted to fly between Spanish cities for an airline that is based in Malta. Exemption does not apply because the work is done in Spain.
  • A pilot is self employed and works part time for various private jet charter companies and private jet crew agencies. The exemption does not apply because the pilot is self employed and it only applies to employment contracts.

Spence Clarke specialises in the provision of Spanish tax, accounts, law and labour services, mainly to foreigners with interests in Spain. Our cross-border knowledge helps clients adapt to the Spanish system with the minimum of doubt and disruption. If you have any questions about this article or any other matter contact us, with no obligation, to see how we can help you.