Beckham Law in Spain
What is the Beckham law?
The Beckham Law, also known as the special regime for posted employees or the Impatriate Law, offers all those interested in residing and working in Spain the possibility to opt for a more beneficial tax regime. Under the Beckham Law in Spain, posted employees can be taxed at a flat tax rate of 24% for 6 years, instead of the progressive personal income tax (IRPF) which ranges from 19% to 47%.
The Beckham Law regime allows beneficiaries to be taxed at 24% on all their income up to a limit of 600,000 euros. Once this figure is exceeded, the 47% tax rate is applied again, as for all other taxpayers.
This regime is optional, but a number of requirements must be met in order to apply for it. Anyone wishing to apply must submit an application to the Tax Agency and, once the documentation has been reviewed, the Tax Agency will decide whether to approve the application.
Main requirements for the application of the Beckham Law ( 2024)
To take advantage of the tax benefits of the Beckham Act, a number of requirements must be met. If you are considering applying for the Beckham Law, these are the essential criteria you must meet:
- The applicant must not have been a tax resident in Spain for the five years prior to relocating for work purposes.
- You must move to Spain for work purposes, hold a job offer prior to your entry into Spain, hold a Spanish digital nomad visa, move from a foreign company or be a director of a company without owning more than 25% of its shares (unless you hold a start-up/entrepreneur visa).
- The work carried out in Spain must constitute the majority of the applicant’s professional activity. A maximum of 15% of the work can be carried out abroad.
- The employer may be a Spanish or foreign legal entity, but the income must not be attributed to a permanent establishment in Spain..
- It is essential to note that these conditions extend to the applicant’s spouse and dependent children under the age of 25, as well as elderly or disabled parents who move with the taxpayer within the first year of the application.
The application for the special regime must be made within six months of registration with the Spanish Social Security. and include the following documentation:
- Your passport and NIE number
- Spanish Social Security number
- Employment contract
Who cannot apply for Beckham’s law?
While the Beckham Law in Spain opens the door to tax advantages for many expatriates, there are specific exclusions to be aware of. The following groups are not eligible to apply for the Beckham’s Law regime:
- Freelancers or self-employed individuals, with the exception of those possessing a digital nomad visa.
- Sports professionals, including athletes, irrespective of their income level or status within their respective fields.
- Directors who have an ownership stake exceeding 25% in Spanish companies, unless they qualify and apply under a startup or entrepreneur visa program.
