The Beckham Law is a 24% flat-rate tax regime initially designed to attract high-profile individuals like David Beckham to Spain. While playing for Real Madrid, Beckham benefited from paying only non-resident taxes on his Spanish income, instead of being taxed on his global earnings.
Officially referred to as the régimen especial para trabajadores desplazados a territorio español, this scheme, somewhat ironically, is no longer accessible to footballers. However, it remains available to both expats and Spanish nationals residing abroad who move to Spain for work purposes.
In this article, we’ll break down who is eligible and how the regime operates.
What exactly is the Beckham Law?
The Beckham Law offers a unique tax advantage for those who qualify. While individuals under this regime are considered tax residents in Spain, they are taxed similarly to non-residents.
With the Beckham Law, you get a flat 24% tax rate on income earned in Spain, like your salary. The best part? Any income, gains, or assets from outside Spain aren’t taxed at all.
Consider David Beckham's time at Real Madrid: while he paid Spanish income tax on his salary, dividends from his UK-based company remained untaxed.
Who can qualify for the Beckham Law?
The Beckham tax regime is for anyone (including Spanish and other EU nationals) that meets the following requirements:
1. You must spend more than 183 days in Spain
To qualify for the regime, you must establish Spanish tax residency by spending more than 183 days in Spain within a calendar year.
While this may seem straightforward, it’s worth noting that there are two other ways someone can become a Spanish tax resident: by having the center of their economic activities or interests in Spain, or by having their immediate family (spouse and children) reside there.
The 183-day rule is designed to prevent misuse of the regime, ensuring individuals cannot simply establish a family home or business in Spain as a way to avoid taxes they would otherwise owe in other countries.
2. You must not have been a Spanish tax resident in any of the past 5 years
The purpose of the regime is to attract newcomers by providing temporary tax incentives. However, it is not available to individuals who are already Spanish tax residents. Importantly, paying Spanish non-resident tax does not disqualify you from eligibility.
3. You must move to Spain to work
To qualify, the move must directly result from either a job transfer or the decision to accept a new role in Spain. Taking a short holiday—one or two weeks—before starting work is perfectly fine. However, relocating to Spain, searching for a job, and then attempting to qualify for the regime is not permitted.
There are five ways to fulfill this requirement:
a) A New job with a Spanish employer
This applies if you are employed (i.e. not a contractor) by an employer registered in Spain, except for those of professional sports players - ironically, despite the name, sports players can no longer benefit from the Beckham regime.
b) Transfer to Spain within existing job
If your employer transfers you to a Spanish branch or subsidiary of their company, you would find yourself in this category. In this case, you would need a letter from your employer ordering the transfer.
c) Digital Nomad employee (NEW in 2023)
This would apply if you move to Spain but keep your foreign employment, carrying out your work remotely.
It's important to note that in Spain, the concept of being an employee is different from countries such as the UK and the US. Company owners should NOT apply for the Beckham law, as under Spanish law, they are not considered to be employees.
d) Starting a Spanish company or becoming a Director in an existing company
Previously, the regime excluded those who held over 25% of the share capital, but it no longer maintains this restriction. The only exclusion is that the company cannot be a property or other asset-holding company.
e) Becoming self-employed in Spain if the activity is considered to be 'innovative' (NEW in 2023)
Until now, the self-employed were specifically excluded from the Beckham regime.
However the Start up Law has introduced the possibility of freelancers being able to benefit if they fall under one of the following categories:
- The activity carried out has special economic interest for Spain, with a favourable report by ENISA being issued
- The freelancer is considered a highly qualified professional who provides services to emerging companies, or with over 40% of the freelancer's income being derived from training, research, development and innovation activities
- The self-employed person has been granted the Entrepreneur residency.
4. You must not receive income through a 'permanent establishment' in Spain (with exceptions)
A Permanent Establishment (PE) is a concept in international tax law that determines whether a foreign business has a sufficient presence in a country to be subject to taxation there. Essentially, it’s like a “home base” for a business operating in another country.
This poses a significant consideration for small business owners and sole proprietors. For example, if you frequently visit Spain to sign contracts or negotiate deals for your company, you risk being classified as having established a PE in the country.
However, if you are an employee with little to no ownership in the company, and your role is primarily limited to supporting tasks—such as administrative duties unrelated to sales or contract signing—the likelihood of triggering a PE designation is minimal.
How to apply
Need help navigating the paperwork for tax benefits in Spain? That’s where MyTaxes steps in. Our specialists are experts in Spanish tax law and can guide you through the entire process, ensuring you gather all the required documents to apply.
Remember, timing is key! You only have six months from starting your employment in Spain to submit your application. Don’t miss your chance to maximize your benefits.
Get in touch with us today to get started.