Beckham Law in Spain

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Do you know about the Beckham Law in Spain? At DiG Lawyers, we take pride in our track record of successfully handling over 300 client requests annually. Our expertise in taxation and in-depth understanding of the Beckham Law has allowed us to deliver satisfactory results consistently, year after year.

Each request represents a unique case, individual, and need. We approach them all with an unwavering commitment to excellence and customer satisfaction. From the initial consultation to finalising each case, our team of expert lawyers works diligently to ensure every detail is addressed and every client’s need is met.

Join the hundreds of satisfied clients who trust us with their taxation matters each year. Contact DiG Lawyers today to start your journey towards optimized taxation under the Beckham Law.

Fiscal Benefits

Tax Advantages Summary

1. Employment Earnings:

- Personal income up to €600,000 annually is taxed at a fixed rate of 24%.
- For earnings above €600,000.01, the tax rate is 47%.

2. Global Salary Inclusion:

- All salaries and similar earnings received worldwide must be included in this Spanish tax scheme.

3. Other Income (only if earned in Spain):

- Capital gains
- Income from movable capital (e.g., dividends, interests)
- Rental income

4. Time Frame:

- The special regime can be applied for a maximum of 6 years, starting from the year it’s granted and the following five years.

5. Spanish Wealth Tax:

- Only assets located in Spain are taken into account.

6. Form 720 Exemption:

- This regime removes the obligation to submit the controversial Form 720.

Why DiG Abogados?

We are a professional law firm specialized in Beckham's Law in Spain and other related procedures

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Take advantage of Spain's laws

What is the Beckham Law or Ley Beckham in Spain?

The Impatriate Special Tax Regime in Spain, colloquially known as the «Beckham Law«, provides non-resident tax status for foreign employees relocating to Spain, offering significant benefits in certain circumstances. This provision creates appealing conditions to draw talent, skilled professionals, and executives from overseas. This law became synonymous with famed English footballer David Beckham during his time in Spain playing for Real Madrid C.F., as he was among the first high-profile foreigners to utilize this special tax regime, hence the popular name. However, as of 2015, professional athletes are no longer eligible for this tax benefit.

Understanding the Beckham Law in Spain

The Beckham Law in Spain, or special tax regime for impatriates, is a distinct personal income tax scheme designed for foreign individuals who, due to employment, relocate their tax residency to Spain. Under this law, they are permitted to pay taxes as non-residents for a designated number of years. This arrangement can result in reduced tax liability for those meeting specific criteria, making it a compelling incentive for Spanish companies in the hunt for talent.

Beckham Law in Spain Requirements

You must not have been a tax resident in Spain in the previous 5 years.
The nature and execution of your job role should necessitate your relocation to Spain.
You should be employed by another entity (i.e., not self-employed with the exception of performing an entrepreneurial activity certified by the Spanish body called ENISA).

How can I become eligible for the Beckham Law?

The application deadline is six months, beginning from the day you are officially registered as an employee with the Spanish Social Security.

Once your application is approved, you can enjoy favourable tax rates for a period of six years. However, an annual tax return is a mandatory part of this agreement.

Key Changes to the Beckham Law

Spanish law has revamped the expatriate tax regime by reducing the non-residency period in Spain from 10 to 5 years prior to your arrival year. This adjustment can take place either in the first year of the regime’s application or the year before.

As stipulated by Article 93 of the Spanish Personal Income Tax Act, the special tax regime sets a flat tax rate of 24% for employment income up to €600,000.00, and 47% for anything above. This taxation model remains effective prior to the enactment of this new legislation.

Furthermore, the updated regulations broaden the reasons for applying for the Beckham Law. Previously, eligibility was only for those physically moving due to employment with a Spanish company or assuming a director role (holding less than 25% of the share capital). The updated law extends this to those employed by a foreign company but working remotely from Spain – a provision that caters to digital nomads.

Moreover, the revised regulations open up the Beckham Law to all directors of Spanish companies, irrespective of their share capital stake. However, if the company is a holding company, the regulations require holding less than 25% of the share capital.

The changes also accommodate entrepreneurial activity in Spain, particularly innovative ventures with significant economic interest to the country. Highly skilled professionals offering services to companies or engaging in training activities and R+D+I (Research, Development, and Innovation) may also qualify.

Importantly, the updated law extends the special tax regime to the spouse and children below 25 years (or any age if they are disabled) who relocate with the taxpayer, either initially or later, as long as it is within the taxpayer’s first residency year.

Lastly, it’s crucial to remember that there’s a 6-month deadline to apply for the special tax regime from the date of registration with the Spanish Social Security system.

What tax advantages can I benefit from?

Apart from reductions in income tax, there are also benefits pertaining to capital gains and dividends. Taxes on real estate assets only apply if they are properties located in Spain, thus safeguarding your international real estate portfolio.

Dividends sourced outside of Spain are not subject to tax, whereas those generated within Spain are taxed annually at rates between 19% and 28%. Yet, capital gains tax might be payable in the country where the assets are located or where they have been sold.

The primary advantage is that an individual is taxed only on their Spanish income, limited to 24% for up to €600,000 per annum. If the income exceeds this limit, then it is taxed at a flat rate of 45%.

There is no effect if your stay exceeds 183 days a year in the country as you will be taxed under the regulations applicable to non-residents.

For taxation purposes, you are essentially considered a non-resident.

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