Beckham Rule & Spanish Tax

In 2006 we published a Spanish tax article on the Beckham rule, written in English, called “Espana Manana“, looking at how football has influenced the regulations of a special tax resident regime in Spain. Since then, Del Canto Chambers has provided advice to many international clients on this special tax regime.


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The Beckham rule is a special Spanish tax regime aimed at benefiting international expatriates who move to Spain. The rule reduced substantially the highest Spanish income tax rate of 45% to 24% on the first €600,000, and wealth tax will be applicable only to Spanish-based assets.

Why is it called Beckham rule?

Although there is still some disagreement as to why it is called the Beckham rule, the reasons are very clear to Del Canto Chambers. In 2003, members of our team were on the UK tax team advising Manchester United on the negotiations with Real Madrid. Interestingly enough, Beckham joined Real Madrid on 1st July 2003 – right on time to be considered non-resident in Spain that year.

To ensure that 2004 was not a problematic year for Beckham financially, in December that year, the Spanish government passed Ley 62/2003 to ensure that tax regulations were in place for the year ending 2004, under article 9.5 of the Spanish income tax law. Legislation was put in place to accommodate Beckham, and Owen, who joined Real Madrid that same year. Therefore, since 2004 and the five years thereafter, Beckham and Owen were able to pay the much preferable fixed non-resident tax rate.

It was not until 2005 when proper legislation was developed to solidify the tax position. Of course, it was not called the Beckham rule at the time, and football was not mentioned at all. The purpose of the Royal Decree 687/2005 was to attract international talent.

The Law was abused by Spanish football clubs who aimed to attract the best players by using this to their advantage. However, two years after the 2008 crisis, a rule was passed limiting the beneficial tax rate to €600,000. David Beckham had left Real Madrid for good some years before that law was passed.

Meanwhile, in 2015, the Spanish government went one step further and completely excluded professional athletes from applying for this. However, those already on a contract were not affected. The €600,000 limit was also removed, but any income over that level is now taxed at 45%.

And this is how the history of “The Special Displaced Workers Regime Act”, nicknamed the ‘Beckham Rule’ came into effect.

How does the Beckham rule works in practice?

The tax regime offered by the rule is still very beneficial to individuals who earn under €600,000 per year applying for their Spanish tax residency. The requirements are as follows:

  • They have not been residents in Spain for the 10 years prior to their moving into Spanish territory
  • They move to Spanish territory because of an employment contract
  • The duties of employment are in effect performed in Spain

The main benefit is that while in the resident income tax regime there is a progressive tax rate scale, the non-resident tax only has two tax rates. The first €600,000 will be taxed at 24%, and 45% above that.

The Spanish Income Tax rates for residents

The applicable tax rates for residents in the year ending 31st December 2020 is as follows:

Taxable base
(up to EUR)
Tax liability (EUR)Excess of taxable base
(up to EUR)
Tax rate (%)
0012,45019
12,4502,365.507,75024
20,2004,225.5015,00030
35,2008,725.5024,80037
60,00017,901.50Remainder45

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