The favorable tax regime provided for foreign citizens in Spain: the «Beckham Law»

The «Beckham Law» (named after the football player David Beckham, one of the first beneficiaries in Spain) is a special tax regime in Spain designed specifically for foreign citizens relocating to the country. It allows them to benefit from a fixed income tax rate of 24% or 47%, depending on their earnings.

This favorable tax regime allows all expatriates moving to Spain to have a much more favorable taxation, allowing them to pay wealth and income taxes as if they were non-residents for the first 6 years of residency in Spain (tax year of the change of residency and the following 5 tax periods). All those who move to Spain for work-related reasons and meet the requirements can benefit from the so-called «Beckham Law.»

There are various requirements under Spanish law for the application of the «Beckham Law,» including:

• Not having been a resident in Spain in the 5 years prior to the change of residency (Even a Spanish citizen who has lived abroad in the previous 10 years can benefit from this law)

• The transfer to Spain must be due to one of these reasons:

A. For an employment contract offered by a Spanish employer, excluding professional athletes B. For teleworking from Spain

C. To become an administrator of a company

What are the main benefits for those who can benefit from the «Beckham Law«? Firstly, this law stipulates that the beneficiary pays taxes exclusively in Spain, so income earned abroad will not be taxed in Spain (unless it is employment income). Capital income (dividends, stocks, interests, etc.) obtained abroad will not be subject to taxation in Spain and will be exclusively taxed in the country of origin.

Beneficiaries of the «Beckham Law» will still be subject to wealth tax in Spain (only on assets and rights located in Spain) and inheritance and gift tax. If a taxpayer is entitled to benefit from the «Beckham Law,» their children and spouse can also enjoy this right.

The fixed rate of income tax (IRPF) provided by the «Beckham Law» is 24%, while it becomes 47% for incomes exceeding EUR 600.000 annually.

In addition to meeting the above-mentioned requirements, it is essential, for the application of the «Beckham Law,» to possess the NIE (How to obtain the NIE in Spain?), NAF (Social Security Affiliation Number), a regularly registered Spanish employment contract, and a series of documents and certificates that the company in Spain must prepare.

BarcelonaGlobalService can prepare everything you need for the application of the «Beckham Law.»

For more information, contact BarcelonaGlobalService via email at francesco@barcelonaglobalservice.com. (Facebook: https://www.facebook.com/Barcelonaglobalservice).