The special highly favourable tax regime provided for foreign citizens in Spain, the so called «Beckham Law»: how to earn a lot of money in tax and keep safe your income and properties outside Spain for 6 fiscal years

The «Beckham Law» is a special tax rule in Spain that helps foreign citizens who move there. It’s called the «Beckham Law» because David Beckham, a famous football player, was one of the first people to use it. This law makes it easier for expats to pay taxes in Spain.

This tax rule lets foreign citizens pay a simpler tax rate for their income.

They can choose between a tax rate of 24% or 47%, depending on how much they earn. The 24% rate applies to most people, but if they make more than €600,000 a year, they have to pay 47%.

The law gives expats a better tax deal for the first six years they live in Spain.

During this time, they are treated like non-residents for tax purposes. This means they only pay taxes in Spain on income they earn there, not on money they bring from other countries. However, if they earn money through work while living in Spain, that will be taxed in Spain.

To use this law, expats must meet certain conditions.

First, they shouldn’t have been a tax resident in Spain for the past five years. Even if they are Spanish citizens who have lived abroad, they can qualify if they’ve been away for a long time.

They also need to move to Spain for a specific reason.

These reasons include:

– Taking a job with a Spanish company (but not if they’re a professional athlete)

– Working remotely from Spain

– Becoming an administrator of a company

One of the main benefits of the «Beckham Law» is that people who qualify pay taxes only in Spain.

Money they earn abroad is not taxed in Spain unless it’s from working in Spain. Other types of income, like profits from investments, are not taxed in Spain and are taxed in the country where the income is made.

Even though they are taxed in Spain, people who use the law still have to pay wealth tax on assets they own in Spain.

They also have to pay inheritance and gift tax, just like regular residents.

If someone qualifies for the «Beckham Law,» their spouse and children are also allowed to use the same tax benefits.

In addition to meeting the mentioned requirements, it is important to apply for the «Beckham Law» by having the NIE, NAF, a registered Spanish employment contract, and several documents and certificates that the Spanish company needs to prepare.

Important information for those considering applying for the «Ley Beckham» (Beckham Law)

We have already explained in detail the benefits and how the Régimen especial artículo 93 de la Ley del Impuesto sobre la Renta de las Personas Físicas, known as the “Ley Beckham,” works in our article: The favorable tax regime provided for foreign citizens in Spain: the «Beckham Law» – Barcelona Global Service

Since we often get questions from our clients, here are some key points to remember if you plan to apply for the «Ley Beckham»:

– Always do a simulation to check what your IRPF (withholding tax on your salary) will be.

If it is less than 24% (or if you don’t have a good reason to think it might go over 24% in the next few months), then the Beckham Law may apply to you.

– BarcelonaGlobalService always does this simulation for free and without any obligation before submitting a request to the Spanish Tax Agency.

– Remember that for any form or application to the Spanish Tax Agency, you need to already have an NIE.

How to get the NIE? Info: NIE

Ensure you remember to apply at your municipality of residence (or Italian consulate) for a marriage certificate in multilingual format and birth certificates for your children in multilingual format, as you will need to prove your family ties to the Agencia Tributaria to extend the rights given by Form 149 (Application for Ley Beckham). If you don’t have these documents, you will need the original certificates with a certified translation and an Apostille.

More info on the use of European templates: Multilingual forms that are exempt from legalization and translation, to be used in EU states according to Regulation No. 1191/2016.

Remember, the application for Ley Beckham is due within 6 months from the date of registration («alta laboral») of the worker with the Spanish social security system.

It is not possible to apply for Ley Beckham unless the worker has already been registered.

You must have resided in Spain for the previous 5 years prior to applying for Ley Beckham.

Note that directors of a Spanish company cannot own more than 24 percent of the company in order for the law to apply and qualify for tax benefits.

Now is a good time to request the application of the “Ley Beckham” (Beckham Law), and those who can should do so as soon as possible.

The special tax regime (Régimen especial, Article 93 of the Law on Personal Income Tax) known as the “Beckham Law” has been the subject of much political debate. It’s a privilege available to foreign workers who have lived outside Spain for at least five years. The intent was to help attract talent, but it’s clear that such laws end up creating significant benefits—mainly in the form of reduced tax burden—without actually providing financial benefit to the taxpayer. In Spain, for instance, tax authorities may raise penalties significantly, setting expectations that they need to be aware of. This is not a popular measure especially in a country like Spain, where the tax authority has often been criticized for its approach. As a result, we strongly advise individuals and professionals to apply for the “Beckham Law” as soon as possible.

Here is a brief summary of the key points and implications of applying for the “Beckham Law.”

We have discussed the benefits and functioning of this special tax regime in detail in the article: The favorable tax regime provided for foreign citizens in Spain: the «Beckham Law» – Barcelona Global Service

Relevant for potential applicants of the “Beckham Law” are the following considered far to be highlighted:

– Always simulate the expected IRPF (withholding tax) that you will be subjected to, as it is generally understood that you should make sure you do not face a tax rate over 24% in the following months.

BarcelonaGlobalService always does a free simulation, with no obligations, before possibly submitting a request to the Spanish Tax Agency.

Remember that for any submission, form, or application to the Spanish Agencia Tributaria, you must already have an NIE.

How do you get an NIE? Information: Frequently Asked Questions about NIE (Número de Identificación de Extranjero) – Barcelona Global Service

Remember that the Ley Beckham can also apply to your spouse and children (obviously of working age).

So before you go to Spain, you must apply at your municipality of residence (or Italian consulate) for a marriage certificate in “Multilingual” (or “Plurilngual”) format and a birth certificate for your children in “Multilingual” (or “Plurilngual”) format. You will need these documents to prove to the Agencia Tributaria the family relationship with the other family members in order to extend the benefits granted by accepting Form 149 (Application for Ley Beckham). If you don’t have these certificates, you will need the originals with a sworn translation, also original, and an Apostille. More information about using European templates:

Multilingual forms exempt from legalisation and translation, to be used in EU states according to European Regulation No. 1191/2016 – Barcelona Global Service

Remember that the deadline to file an application for Ley Beckham (“Regimen para impatriados”) is six months from the date you register (“alta laboral”) with the seguridad social (the date your employment starts with a Spanish company).

You cannot apply for Ley Beckham before you have an already registered employment and you cannot have been residing in Spain during the past 5 years prior to your Beckham Law application request

You must not have been a resident in Spain in the five years before you apply for Ley Beckham.

More information about tax residency: https://barcelonaglobalservice.com/2023/09/30/understanding-tax-residency-in-spain-a-complete-guide-for-foreigners/

Regarding directors of a Spanish company: they cannot own more than 24 percent of the company for the law to apply and thus qualify for tax benefits.

The special tax regime introduced by the «Ley Beckham» can apply for up to 6 years, which includes 5 years plus the retroactive year in which the tax regime is applied. It also covers the taxation of income received from abroad, up to 600,000 euros. The application for the «Ley Beckham» must be made within 6 months from the date of hiring with a Spanish company.

IMPORTANT: you can apply for the Bekcham law even though you just have your NIE in a white sheet format (Also called “Certificado de no residente” or “Asignacion de NIE”): you won’t need the “Certificado de registro de ciudadano de la Union Euorpea” (EU-resident green card) at all, this is just a urban legend

Do you need professional assistance in applying for the preferential tax regime, known as “Ley Beckham” in a very fast way (maximum 1 week)? For more information, contact BarcelonaGlobalService at francesco@barcelonaglobalservice.com

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