The Beckham Law is a tax regime in Spain which saves a lot of money in taxes. Earned income is taxed at the maximum rate of 24%, instead of the progressive scale of 47%. In addition, lump-sum income is not taxed in Spain.
This scheme seeks to attract talent, highly qualified personnel who come to Spain with a great job offer. Therefore, the requirements are not having resided in Spain for the last 5 yearsstarting a job and having no self-employment income in the country.
The technical name of this law is the Special Regime for Posted Workers, and it is included in the Personal Income Tax Law. Among its objectives is to make it easier for companies in Spain to attract global talent.
Profile of Beckham Law Applicants
- Workers who have just moved to Spain to carry out an economic activity working for a company.
- Chief Executive Officers who become employed by a company, provided that they own less than 25% capital stock of that company.
- High net worth expatriates in management or executive positions.
- Highly qualified professionals who provide services to emerging companies or carry out training, research, development and innovation activities.
- Digital nomads hired by a company.
Self-employed remote workers and entrepreneurs cannot apply for this tax regime. However, as we explained in our blog, they can establish residency in Spain with the self-employed work visa or Digital Nomad Visa.
The tax benefits are maintained during the first 6 years in Spain. Then, it is taxed as the rest of the residents.
Tax benefits
- Earned income is taxed at 24% up to €600,000. What exceeds that amount is taxed at 47%. Using the Beckham Law calculator,in the case of a person with a gross salary of €200,000 per year, he/she will receive €148,520 with the law and €119,016 without it.
- Income obtained outside Spain is not taxable in Spain. This does not exempt from paying taxes in the countries where such income was produced, if applicable.
- Assets held abroad are not taxed in Spain.
- You do not have to declare assets abroad in excess of €50,000. This means that the Model 720 is not filed.
- Capital gains obtained in Spain are taxed between 19% and 26%.
- The wealth tax per property in Spain is between 0.2% and 2.5%.
Application requirements
- Come with a job
The worker must have been posted to Spain for one of these employment reasons:
- As a consequence of an employment contract.
- For being the administrator of a company. Although it is not possible to have a shareholding of more than 25% of the capital stock.
- For the performance of an economic activity qualified as "entrepreneurial activity".
- For the provision of services by highly qualified professionals to emerging companies or for the performance of training, research, development and innovation tasks.
- Income from work activities outside Spain cannot exceed 15% of the total.
- It is not possible to be self-employed in Spain and generate income.
- Not having been a tax resident in Spain in the last five years.
- The Beckham Law application must be submitted within 6 months of registration with the Spanish Social Security system.
What about the family?
The applicant's family can accompany him/her in his/her relocation, settle in Spain and apply for the tax benefits of the Beckham Law themselves. To do so, the applicant's spouse and children under 25 years of age must meet these requirements:
- Who move to Spain with the Beckham Law applicant or at a later time, provided that the first tax period of application has not ended.
- That they acquire their tax residence in Spain.
- They have not resided in the country in the previous five years, nor do they obtain income from a self-employed activity.
- Your earned income is less than that earned by the Beckham Act applicant.
Disadvantages
Unlike the usual tax rules for Spanish residents, those who obtain Beckham Law:
- They will not be able to use most of the double taxation treaties.
- They will not be entitled to deduct expenses.
- In case of dismissal from employment, they will have to pay taxes on the amount of the severance payment.
How to apply for the Beckham Law in Spain?
It is an optional tax regime. Those who meet the requirements may apply to the Spanish Tax Agency (Agencia Tributaria). These are the steps to follow:
- The application to this law must be made within 6 months of the registration with the Social Security. The documentation is sent to the Tax Agency, either in person or telematically.
- First, Form 030 is filed.
- Once approved, the Application Form 149 must be sent. In doing so, the passport, NIE, employment contract and Social Security affiliation number must be attached.
- In a period of 10 days we will inform whether the application has been accepted or not.
We are a a law firm in Barcelona, we specialize in services for Argentinians and foreigners in general. We offer advice and assistance with tax matters. If you only need advice, please don't hesitate to contact us email or Whatsapp. We offer video conference or in-person consultations, lasting 45 and 60 minutes, with fees of €115 and €150.
