Military Personnel: Avoid Losing Money on Taxes

International tax expert Manuel Pérez (@intertaxesp) shared a common mistake military personnel make when filing their tax returns, resulting in significant financial losses.

Exemptions for Military Missions

Pérez emphasized that military personnel can exempt substantial income from taxation when deployed overseas by the army.

“Income earned during international missions, overseas ship deployments, and detachments—common assignments for military personnel—qualifies for exemption from income tax (IRPF),” he explained.

“Many soldiers are likely unaware of this exemption, potentially losing a significant amount of money in taxes,” Pérez added.

Exemption Application

Pérez noted that the application of exemptions depends on specific circumstances and is not automatic or general.

“There are various exemptions available, both internationally and within IRPF regulations,” he said. “However, the applicability needs to be assessed on a case-by-case basis.”

Army’s Role

Pérez raised concerns that the Army and the Ministry of Defense often fail to apply these exemptions on military payrolls or communicate them effectively.

“As a result, military personnel are often unaware of their entitlement to these exemptions,” he clarified.

Steps to Take

Pérez advises military personnel to:

• Familiarize themselves with the available exemptions and their eligibility criteria
• Review their pay statements carefully and identify any potential discrepancies
• Consult with a tax professional to assess their individual situation and determine applicable exemptions

Avoid Financial Losses

By understanding and claiming their rightful tax exemptions, military personnel can avoid unnecessary tax burdens and maximize their financial well-being.

Pérez’s video on TikTok has garnered significant attention, with over 430,000 views and 12,400 likes. His insights can help military personnel navigate the complexities of tax filing and save substantial amounts of money.