What is the 'Beckham Law' in Spain?

The Beckham Law allows expatriates working in Spain to be taxed as non-residents, which can result in significantly lower tax rates compared to the standard resident rates. Under this regime, eligible individuals are taxed at a flat rate of 24% on their Spanish-sourced income up to €600,000, with income above this amount taxed at 47%. Non-Spanish income is generally exempt from Spanish tax while under this regime.


To determine if you are eligible for the Beckham Law, consider the following criteria:

  1. New Arrival in Spain: You must not have been a tax resident in Spain during the ten years preceding your application for the regime.

  2. Employment Contract: You must have an employment contract with a Spanish company or be transferred to Spain by a foreign company.

  3. Specific Roles: The regime is typically available to employees, including directors of companies who hold a significant shareholding (more than 25% of the company’s equity) and professional athletes.

  4. Timely Application: You must apply for the Beckham Law within six months of starting your employment in Spain.


If you qualify, you can benefit from the Beckham Law for up to five years. After this period, you will be subject to the standard Spanish resident tax rates.


Key considerations inclue:

  1. Scope of Taxable Income:

    • Spanish-Sourced Income: This includes your salary, bonuses, and other compensation from Spanish sources, taxed at the flat rate of 24% up to €600,000.
    • Non-Spanish Income: Income earned outside Spain is generally not taxed in Spain under this regime. However, specific cases may vary, so it’s important to verify your particular situation.

  2. Wealth Tax and Other Obligations:

    • While the Beckham Law offers benefits on income tax, be aware that it does not exempt you from other taxes like Spain’s Wealth Tax or tax obligations on property you may hold in Spain.

  3. Timing and Compliance:

    • The application process is time-sensitive. If you miss the six-month application window, you may lose your eligibility for the regime.
    • Ensuring compliance with the regime’s requirements is crucial. Non-compliance could result in losing your non-resident tax status, which might lead to significant tax liabilities.

  4. Expatriation Rules:

    • The law is primarily aimed at highly skilled professionals, managers, and athletes. Ensure that your role and employment situation meet the current rules.

  5. End of the Beckham Law Period:

    • After five years, you will be taxed as a resident, subject to progressive tax rates on your worldwide income. Planning for this transition is essential to avoid unexpected tax obligations.

  6. Seeking Professional Advice:

    • Given the complexities involved, it’s highly recommended to consult with tax professionals or legal advisors who specialize in Spanish tax law. They can help you navigate the Beckham Law and ensure you’re fully compliant with Spanish tax regulations.


The Beckham Law can offer significant tax savings during your first five years of employment in Spain, but it’s important to ensure you meet the eligibility requirements and adhere to the application deadlines. Consider speaking with a regional tax advisor, if you'd like to take advantage of the 'Beckham Law'.

 

Was this article helpful?

That’s Great!

Thank you for your feedback

Sorry! We couldn't be helpful

Thank you for your feedback

Let us know how can we improve this article!

Select at least one of the reasons
CAPTCHA verification is required.

Feedback sent

We appreciate your effort and will try to fix the article