The Beckham law in Spain is a special expats tax regime that enables foreigners who have moved to Spain the option of paying tax as non-residents, so that their Spanish employment income is taxed at a fixed rate of 24% up to 600,000 euros rather than the progressive tax rates applicable to Spanish residents. If taxed as a resident, the expat would be subject to a progressive tax scale up to 43% depending on their level of their worldwide incomes.
Beckham Law for Expats
Unsurprisingly, the Beckham law in Spain originated from David Beckham. The Beckham Law for expats in Spain took its name from Beckham’s tax reform after his arrival to Real Madrid. The Beckham Law aims to provide a tax regime in Spain that boosts the economy by attracting foreign capital through the residence of highly wealthy and successful expats who become residents.
The Beckham Law in Spain
There are specification conditions and exemptions for the application of the Beckham Law for expats:
- The expat must be a first-time resident to Spain.
- The expat must have relocated to take up an employment contract in Spain.
- Employment duties must be carried out in Spain, although if they must also perform part of their duties outside Spain, the percentage of their income earned from these activities must not exceed 15%.
- The work must be performed for a Spanish corporate entity, or for a permanent Spanish establishment of a foreign company.
- The application must be made within 6 months of commencing the employment contract.
- The exemption applies in the year of arrival and for the following 5 tax years, for a total of 6 years.
- Any capital gains obtained in Spanish territory will be taxed at 35%.
How we can help
This area of tax is incredibly complex and you should seek advice to ensure that it is the right tax mitigation route for you. For those who may have great incomes or investment potential, the Spanish Golden Visa Scheme may be more appropriate.
If you have any questions regarding Spanish citizenship or residency by investment then please contact Del Canto Chambers’ Spanish legal and tax specialists.