The Beckham Law, named after football star David Beckham, was designed to bring innovation, investment, and global talent to Spain. If you qualify, you can enjoy a flat 24% tax rate on Spanish income up to €600,000 for six years—much lower than the standard tax rates. Plus, you won’t pay any taxes on foreign income like capital gains or dividends, making it an appealing option for many people.
However, in recent months, the Beckham law and the Spain’s Tax Agency (AEAT) have faced some serious criticism. Allegations from the international law firm Amsterdam & Partners LLP claim that the AEAT has been misusing the law, making life harder for expats and hurting Spain’s reputation as a global talent hub. Although these allegations raise concerns, the AEAT has firmly denied them, highlighting that just 0.5% of Beckham Law beneficiaries—around 185 individuals out of 37,000—have undergone audits.
There's no denying that the AEAT can be remarkably aggressive in its audits and legal actions (just ask Shakira!). However, in our view, the real problem lies in the ambiguity of the wording of the Beckham Law. This has been exacerbated by media misreporting and tax professionals who have failed to provide their clients with accurate guidance. Sensationalized headlines and advisors who lack a full understanding of their clients' business structures and income sources have led many to mistakenly believe they qualify under the regime when, in fact, they do not.
What is the Beckham law?
The Beckham Law, officially called Spain's Special Expatriate Tax Regime (SETR), offers foreign workers moving to Spain a great tax break—a flat 24% rate on income up to €600,000 a year, instead of the usual progressive rates for residents. To qualify, you must not have been a tax resident in Spain for the last 5 years, need to be relocating for work, and must apply within six months of starting your job. The benefit lasts for six years, including the year you arrive.
The Beckham Law Pre-2023
Back in 2010, professional sportspeople were removed from the Beckham Law due to public criticism and controversy over the perceived unfairness of allowing wealthy athletes to benefit from lower taxes.
The Beckham Law didn’t apply to those working for companies located abroad, nor to those moving to Spain to work as directors of a Spanish company if they owned more than 25% of the company’s shares. For the latter, it's not difficult to see why: without such measures, the wealthy could simply move to Spain, establish a company, and pay only 24% on income earned within the country.
The self-employed were also explicitly excluded, which left freelancers and entrepreneurs unable to benefit from the reduced tax rates offered by the Beckham Law.
The Beckham Law Post-2023
In 2023, the Startup Law came into force with the aim of increasing Spain's competitiveness (this is the law which created the Digital Nomad Visa). It brought significant updates to the Beckham Law, expanding its scope to include the following groups:
- those working for companies abroad who are either sent to work from Spain OR who come to Spain of their own accord in order to work through telematic means (i.e. digital nomads).
- the self-employed, as long as they or the organisations they work with are work with are certified by ENISA, the government agency backing business innovation in Spain.
- directors of Spanish companies who own up to 100% of the company’s shares, as long as the company is not classified as an asset-holding entity. It's important to note that the director cannot receive income that would be classified as obtained through a permanent establishment.
Opening the regime up to digital nomads was a smart move - remote workers pay a 24% tax on their salaries without competing for local jobs. Allowing exceptions for self-employed individuals who bring innovation to Spain is equally logical.
Understanding why the 25% restriction for directors of Spanish companies was removed is less straightforward, but it can be seen as an incentive to attract entrepreneurs relocating to Spain, encouraging them to establish businesses that create jobs, pay taxes, and contribute positively to society. However, the rule about avoiding income from a permanent establishment makes things a bit more complicated.
The main concern lies in the fact that, whether intentional or not, the wording of the update is incredibly vague. To give an example - many digital nomads run their own companies as sole directors and shareholders, earning a salary through PAYE in the UK or as a W2 in the US.A plain reading of the law suggests they would likely qualify, as they consider themselves to be employees. However, in Spain, any business owner holding more than 50% of a company’s shares is required to register as self-employed. As we've seen above, self-employed individuals don't qualify for the Beckham Law unless they are engaged in some kind of innovative activity.
Accusation of a "Tax Trap"
Amsterdam & Partners LLP has alleged that the Beckham Law is being misused as a “bait-and-switch” scheme. They claim that expats are initially enticed with promises of favorable tax treatment, only to face aggressive audits and surprise tax demands years later. These audits often come with accusations of ineligibility or retroactive denials of benefits, leaving individuals in financial and emotional distress. Such practices, the firm argues, undermine the purpose of the law and harm Spain’s reputation as a welcoming destination for global talent.
The firm’s recently published white paper, “Hacienda vs. The People: Spain and the Beckham Law,” outlines what they describe as a systemic pattern of intimidation by the AEAT. Among their findings are cases where certified expatriates under the Beckham Law faced retroactive challenges to their eligibility. For instance, some were accused of fraudulent employment arrangements or faced threats of criminal prosecution, creating what Amsterdam & Partners call a "climate of fear."
One particularly troubling example includes a resident hospitalized due to stress after her Beckham Law certification was suddenly revoked. Another case involves a Swedish entrepreneur threatened with prosecution over a legitimate business sale, despite having filed all necessary paperwork correctly.
Incentivized Audits and Financial Pressures
The law firm claims that an AEAT incentive program, approved in April 2025, encourages inspectors to pursue additional tax revenue aggressively. This €125 million incentive pool allegedly results in fabricated or overly zealous investigations, disproportionately targeting high-income expatriates. The firm argues this approach prioritizes revenue collection over fairness or legality, eroding trust in the system.
AEAT’s Counterarguments
The AEAT has rejected these accusations, emphasizing that only 0.5% of Beckham Law beneficiaries (approximately 185 out of 37,000) have been audited. They state that 70% of these cases are resolved through agreements, asserting that their audits focus solely on preventing fraudulent claims, such as those involving shell companies.
While these figures suggest that violations by the AEAT may not be as widespread as claimed, critics, including Amsterdam & Partners, dismiss them as misleading. They argue the numbers fail to capture the emotional, financial, and legal toll taken on those investigated under these alleged practices.
Final Thoughts
Although its wording is notably vague and arguably misleading, we believe the core issue does not stem from the concept of the Beckham Law itself. Spain needs to move beyond just tourism and start focusing on innovation and bringing in top talent, and the Beckham Law is a key tool to help make that happen.
The issue arises from a combination of media misreporting and lack of quality tax advice. Misleading headlines, coupled with advisors who lack a thorough understanding of their clients' business structures and income sources, have led many to mistakenly believe they qualify when they do not.
As in many countries, the Spanish tax system operates on self-declaration. To apply for the Beckham Law, you simply submit the required documents and confirm that you meet the eligibility criteria. However, no verification is conducted by the AEAT at this stage — your compliance is only reviewed if you are audited in the years to come. Many people misunderstand this—they assume that submitting the correct documents and gaining acceptance means they’re set for the next six years.
If you are unlucky enough to be audited and the AEAT determines retroactively that you were not eligible, you would be required to pay back taxes for the years you incorrectly benefited from the regime. This would include interest and penalties, which can be substantial.
There’s a well-known saying: if something sounds too good to be true, it probably is. It is not plausible that Spain would allow owners of foreign businesses to relocate to it's country, paying just 24% tax on their salary and nothing on dividends—leaving the benefits from their company in their country of origin. However, those willing to invest in Spain, build businesses, and create jobs should be rewarded. This is what the latest update of the Beckham Law intends to do — it's now a policy designed to incentivize and reward such contributions while fostering economic growth.