Beckham Law: What foreigners need to know about Spain's special tax regime
Spain’s Beckham Law is a tax regime that enables foreigners who move here to pay much lower taxes than normal. Find out what tax benefits it brings, the changes introduced in 2023, who is eligible and how to apply.
The Beckham Law was first introduced in 2004 to attract talent and highly qualified workers to Spain with fiscal incentives.
It was nicknamed after the footballer David Beckham as he was the first one to take advantage of it when he moved here to play for Real Madrid.
The law's official name is Régimen Especial de trabajadores desplazados o impatriados. These 'displaced workers' or 'inpatriates' are generally foreign employees who are brought to work in their company's subsidiary in Spain.
If you qualify for the Beckham Law, it means that you can pay tax in Spain as if you were a non-resident for a total of six years, even though you live here.
Essentially, you will pay a flat fee of 24 percent up to €600,000.
You will pay this only on income you earn in Spain, instead of a progressive tax on worldwide income. The normal progressive taxes for Spanish residents range from 19 to 47 percent.
In other words, even if you reside in Spain you'll pretty much be treated as a non-resident for tax purposes (spending more than 183 days in a year usually makes you a tax resident).
As if benefitting from a flat income tax fee of 24 percent wasn't enough, you also get advantages when it comes to capital gains tax as well as inheritance and gift tax.
The sale of assets or property abroad will not be taxed in Spain if you qualify and profits from the sale of property in Spain will be taxed at a fixed rate of 19 percent.
Up to 2020, 27,000 people have benefitted from the Beckham Law's fiscal incentives.
What are the recent changes to Spain's Beckham law?
In 2023, the Beckham Law was linked to Spain's new Startups Law and modified to include some more favourable conditions for remote workers and entrepreneurs.
The Startups Law, a far-sweeping bill aimed at bringing more foreign talent to Spain through less stringent bureaucracy and fiscal incentives, has been described as some as a recalibration of the Beckham Law. That's only partly true, as each law addresses different matters.
What has been changed in 2023 in terms of the Beckham Law is that people can apply if they have not been residents in Spain during the five previous years whereas it used to be 10 years.
Additionally, family members can now also benefit from the Beckham Law. Previously, it was only the worker who applied for it that could benefit but Spanish Law 28/2022 states that from 2023 onwards a spouse and children under 25 years of age can now also benefit and pay less tax if they are working in Spain. If children are disabled there are no age limits.
The relocation to Spain may now also take place either in the first year of applying for the Beckham Law regime or during the previous year.
There are better conditions for company directors as well. Previously a minimum shareholding of 25% of the capital was required, whereas now this limit will only be need to be met by directors of asset-holding entities.
Who qualifies for Beckham’s Law?
Not everyone who moves to Spain is eligible for Beckham's Law, unfortunately.
There are several requisites you must meet. These are:
- You must not have been resident in Spain during the five previous years.
- You must have moved to Spain to take up work and have an employment contract with an employer in Spain or work remotely for a company outside Spain.
- You cannot be self-employed, unless it's an entrepreneurial activity that is of an innovative nature and is of particular financial interest for Spain. For this, you must have a favourable report issued by the General State Administration.
How to apply for Beckham Law tax conditions
If you want to benefit from the Beckham Law, you must apply within six months of arriving in Spain, if not, you will no longer be eligible.
You need to apply with Spanish Tax Agency by filling in and sending form or modelo 149.
You will also need:
- Your passport and NIE number, which can be found on your TIE or green residency card.
- Your Social Security number
- Your employment contract with a Spanish company or contract as a remote worker and your digital nomad visa.
Keep in mind that you will also have to apply for a Spanish residency permit, the process explained above refers to getting better tax conditions. The Spanish government recently introduced the EU's Blue Card for highly-skilled and qualified workers to make it easier for such non-EU workers residency in Spain.
Keep in mind as well that even if you don't qualify for the Beckham Law, the Spanish government has also introduced a digital nomad visa for non-EU remote workers. This can give you residency rights but not the fiscal advantages of the Beckham Law.
READ MORE: What are the pros and cons of Spain’s digital nomad visa?
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The Beckham Law was first introduced in 2004 to attract talent and highly qualified workers to Spain with fiscal incentives.
It was nicknamed after the footballer David Beckham as he was the first one to take advantage of it when he moved here to play for Real Madrid.
The law's official name is Régimen Especial de trabajadores desplazados o impatriados. These 'displaced workers' or 'inpatriates' are generally foreign employees who are brought to work in their company's subsidiary in Spain.
If you qualify for the Beckham Law, it means that you can pay tax in Spain as if you were a non-resident for a total of six years, even though you live here.
Essentially, you will pay a flat fee of 24 percent up to €600,000.
You will pay this only on income you earn in Spain, instead of a progressive tax on worldwide income. The normal progressive taxes for Spanish residents range from 19 to 47 percent.
In other words, even if you reside in Spain you'll pretty much be treated as a non-resident for tax purposes (spending more than 183 days in a year usually makes you a tax resident).
As if benefitting from a flat income tax fee of 24 percent wasn't enough, you also get advantages when it comes to capital gains tax as well as inheritance and gift tax.
The sale of assets or property abroad will not be taxed in Spain if you qualify and profits from the sale of property in Spain will be taxed at a fixed rate of 19 percent.
Up to 2020, 27,000 people have benefitted from the Beckham Law's fiscal incentives.
What are the recent changes to Spain's Beckham law?
In 2023, the Beckham Law was linked to Spain's new Startups Law and modified to include some more favourable conditions for remote workers and entrepreneurs.
The Startups Law, a far-sweeping bill aimed at bringing more foreign talent to Spain through less stringent bureaucracy and fiscal incentives, has been described as some as a recalibration of the Beckham Law. That's only partly true, as each law addresses different matters.
What has been changed in 2023 in terms of the Beckham Law is that people can apply if they have not been residents in Spain during the five previous years whereas it used to be 10 years.
Additionally, family members can now also benefit from the Beckham Law. Previously, it was only the worker who applied for it that could benefit but Spanish Law 28/2022 states that from 2023 onwards a spouse and children under 25 years of age can now also benefit and pay less tax if they are working in Spain. If children are disabled there are no age limits.
The relocation to Spain may now also take place either in the first year of applying for the Beckham Law regime or during the previous year.
There are better conditions for company directors as well. Previously a minimum shareholding of 25% of the capital was required, whereas now this limit will only be need to be met by directors of asset-holding entities.
Who qualifies for Beckham’s Law?
Not everyone who moves to Spain is eligible for Beckham's Law, unfortunately.
There are several requisites you must meet. These are:
- You must not have been resident in Spain during the five previous years.
- You must have moved to Spain to take up work and have an employment contract with an employer in Spain or work remotely for a company outside Spain.
- You cannot be self-employed, unless it's an entrepreneurial activity that is of an innovative nature and is of particular financial interest for Spain. For this, you must have a favourable report issued by the General State Administration.
How to apply for Beckham Law tax conditions
If you want to benefit from the Beckham Law, you must apply within six months of arriving in Spain, if not, you will no longer be eligible.
You need to apply with Spanish Tax Agency by filling in and sending form or modelo 149.
You will also need:
- Your passport and NIE number, which can be found on your TIE or green residency card.
- Your Social Security number
- Your employment contract with a Spanish company or contract as a remote worker and your digital nomad visa.
Keep in mind that you will also have to apply for a Spanish residency permit, the process explained above refers to getting better tax conditions. The Spanish government recently introduced the EU's Blue Card for highly-skilled and qualified workers to make it easier for such non-EU workers residency in Spain.
Keep in mind as well that even if you don't qualify for the Beckham Law, the Spanish government has also introduced a digital nomad visa for non-EU remote workers. This can give you residency rights but not the fiscal advantages of the Beckham Law.
READ MORE: What are the pros and cons of Spain’s digital nomad visa?
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