Beckham Law in Spain
The Beckham Law in Spain is a unique opportunity for foreign professionals moving to the country, allowing them to benefit from a special tax regime. Under this law, beneficiaries can pay tax at a flat rate of 24% on income earned in Spain, while global income is exempt, resulting in considerable savings.
Are you thinking of working from Spain or considering a digital nomad visa in Spain? Take advantage of this Special Regime with additional tax advantages, making your stay even more financially beneficial. Law 28/2022, published on December 23, 2022, introduced this regime as part of the effort to promote the start-up ecosystem in Spain.
At Pellicer & Heredia, we have a team of tax lawyers specialized in the Beckham Law application process, offering a comprehensive service ensuring compliance with all requirements.
What is the Beckham Law?
The Beckham Law was introduced in 2005 as a special tax regime in Spain to attract highly qualified professionals and foreign athletes. Initially designed to benefit athletes such as David Beckham, after whom it takes its name, this regime allows certain foreigners to pay taxes as non-residents, with a reduced flat rate.
Law 28/2022, published on December 23, 2022, expands and updates the conditions of the special tax regime to attract foreign talent to Spain, especially in the field of teleworking and start-ups. This law includes measures for digital nomads and displaced professionals, offering them the possibility of paying taxes under a regime similar to that of the Beckham Law, benefiting from tax advantages, such as a flat rate and exemption of income obtained outside Spain.
The main objective of the Beckham Law is to encourage the arrival of international talent to Spain.
Beckham Law requirements
The regime is aimed at highly qualified professionals, athletes, managers, and workers in the technology sector and start-ups. In addition, people who move as digital nomads can also benefit, provided they meet the requirements of the regime, which makes this law especially attractive for teleworkers.
Who can benefit from this special regime?
The Special Regime applies to the following people:
- Foreign workers (or Spaniards who have been living abroad for more than 5 years) who sign an employment contract with a Spanish company and move to Spain due to the job offer, or when their foreign employer sends them a letter of transfer. Also included are cases in which the work is carried out remotely using computer, telematic and telecommunications means and systems.
- Foreigners or Spaniards mentioned above, who intend to develop a business activity in Spain, as defined in article 70 of Law 14/2013, of September 27, on support for entrepreneurs and their internationalization.
Conditions to apply for the Beckham Law
To benefit from the special tax regime of the Beckham Law, it is necessary to meet several conditions.
- Not having been a tax resident in Spain during the previous five tax periods.
- The transfer to Spanish territory must occur in the first year of applying for the regime or in the previous year.
- The application for this Special Regime must be submitted within six months of obtaining residency in Spain.
It is essential to comply with these deadlines and requirements to take advantage of the tax advantages offered by this regime.
How long does the Beckham Law last in Spain?
This special tax regime will be applicable during the tax period in which the taxpayer establishes his habitual residence in Spain and during the following five tax periods, unless the taxpayer chooses to renounce or is excluded from the regime.
The first calendar year in which the residence is acquired and once the stay in Spanish territory exceeds 183 days is considered a tax period.
The spouse and children of the taxpayer under twenty-five years of age (or of any age in the case of disability) may choose to pay the Non-Resident Income Tax while maintaining their status as taxpayers for the Personal Income Tax.
Working in Spain
Spanish tax advantages applying the Beckham Law
The tax advantages are very significant compared to the ordinary national tax regime.
Flat-rate taxation
One of the main tax advantages of the Beckham Law is that it allows displaced workers to pay a flat rate of 24% on income earned in Spain, instead of the progressive rates that apply to normal tax residents.
This flat rate significantly reduces the tax burden, especially for those with high incomes.
For example, a Spanish citizen earning more than €20,199 per year would face a minimum tax withholding of 30%. However, a foreigner who benefits from the Special Regime will be subject to a maximum tax rate of 24% up to €600,000.
For incomes above €601,000, the tax withholding would be 47%. This withholding is much lower than that applied to a Spanish citizen earning more than €300,000 per year. Therefore, it is highly recommended to consider this special regime.
Exemption of income outside Spain
In addition, under this regime, beneficiaries are not required to declare or pay taxes on their income generated outside Spain, which offers significant tax savings for professionals with international sources of income.
Forms from the Spanish Tax Agency related to the Beckham Law
In the management of the special regime of the Beckham Law in Spain, it is necessary to present various forms to the Tax Agency (AEAT) to comply with tax obligations. These models allow both to request inclusion in the regime and to declare the corresponding taxes during the stay in Spain.
Each one has a specific purpose, from the initial application to the fulfillment of annual obligations and the declaration of assets abroad. Below, we explain the most relevant forms,
Modelo 149
149 form is used to request inclusion in the Special Tax Regime of the Beckham Law. Workers transferred to Spain must submit this form to the Tax Agency within six months after starting their work activity in Spain. This model allows you to formalize the option of paying taxes under the non-resident rules with the associated tax benefits.
Modelo 151
Model 151 is used to declare the Income Tax for Non-Residents under the Beckham Law regime. This is the form that must be submitted annually by beneficiaries of the special regime to pay taxes at the fixed rate of 24% on income obtained in Spain. This form allows those who are covered by this regime to comply with the tax obligations.
Form 720
Form 720 is a mandatory information declaration for tax residents in Spain, including those covered by the Special Regime, who have assets and rights located abroad worth more than 50,000 euros. Although the Beckham Law regime exempts them from paying taxes on global income, it is necessary to report these assets to comply with Spanish tax regulations.
How to apply for the Beckham Law in Spain
To apply for the Beckham Law tax regime, it is essential to submit a series of documents. The main one is Form 149, which formalizes the application before the Tax Agency.
It is also necessary to provide an employment contract in Spain, proving that the transfer is for work reasons. In addition, you will need to present a certificate of tax residence abroad for the last 5 years and a copy of your NIE (Foreigner Identification Number).
The employer must issue a certificate confirming your transfer. It is important to gather all these documents correctly and make sure they are legalised and translated, if necessary.
Deadlines and legal procedures
The process to benefit from the special regime must be started within six months of starting work in Spain. It is crucial to comply with this deadline, as applications outside this period will not be accepted.
Once the documentation has been submitted, the Tax Agency will assess the case and confirm whether the applicant meets the requirements. During this process, it is advisable to have specialised advice to ensure that there are no errors or delays.
The Beckham Law regime has a maximum duration of six years, after which the beneficiary must pay taxes as an ordinary tax resident in Spain.
Pellicer&Heredia your tax consultancy to file under the Beckham Law
Effective tax planning is essential to manage family finances. At Pellicer & Heredia, we take care of managing the entire process so that you can benefit from the special Beckham Law regime efficiently and without complications. Our specialized team is responsible for:
- Advising you on your eligibility for the Beckham Law.
- Preparing and submitting Form 149 to benefit from the regime.
- Managing the necessary documentation, such as employment contracts, residence certificates and NIE.
- Complying with annual tax obligations using Form 151.
- Ensuring that you declare assets abroad, if necessary, using Form 720.
Our goal is to optimize your tax situation and maximize the benefits of this advantageous tax regime for foreign workers in Spain. For more information, you can contact Pellicer&Heredia.
FAQs about the Beckham Law in Spain
Can I pay taxes on my income abroad under the Beckham Law?
No, one of the main advantages of the Beckham Law is that beneficiaries are only taxed on income generated in Spain, while income obtained outside the country is exempt from tax in Spain.
This is a great benefit for those with global income, as it avoids double taxation. It is essential to keep a clear record and differentiate income obtained inside and outside Spain to comply with the regulations.
Which professions are not eligible for the Beckham Law?
Although the Beckham Law is open to many qualified professionals, certain professional athletes were excluded from the scheme after recent modifications, as it was originally created with the aim of attracting these figures.
In addition, professions that do not meet the high qualification requirements or that do not align with the strategic sectors defined by Spanish regulations may not be eligible to benefit from this scheme.
Each case must be assessed individually to determine the viability of benefiting from the scheme.
What happens if I don't submit the forms on time?
If you don’t submit the forms on time (especially Form 149 to qualify for the regime), you could lose the possibility of benefiting from the Beckham Law. This means that you would have to pay taxes as an ordinary tax resident, with progressive rates of up to 47% depending on your income, instead of the fixed rate of 24%.
It is important to have a tax advisor like Pellicer&Heredia to not miss the deadlines and take advantage of the tax benefits offered by the regime.
Can I lose the Beckham Law regime if I change jobs?
Yes, you could lose the benefit of the Beckham Law tax regime if you change jobs, especially if you do not notify the Spanish tax authorities or if you do not maintain the criteria that allowed you to benefit from the regime. It is crucial that the new job meets the requirements established by the law, such as being related to an eligible company or sector. It is advisable to report any changes in your employment situation and ensure that you continue to meet the conditions for maintaining the scheme.
Can I renew my tax regime under the Beckham Law?
No, the Beckham Law tax regime has a limited duration of six years, with no possibility of renewal. At the end of this period, the beneficiary must pay taxes as an ordinary tax resident, subject to progressive tax rates on their overall income.
Therefore, it is important to plan ahead to optimize the tax structure and make the most of the benefits of this regime during the six years allowed.
How does the Beckham Law affect self-employed workers?
Self-employed workers can also benefit from the Beckham Law tax regime, provided they meet the requirements, such as moving to Spain for work reasons. In this case, the self-employed person must prove that their activity is related to highly qualified sectors or relevant to the start-up ecosystem, such as technology, consulting or professional services.
By taking advantage of this regime, the self-employed worker can pay taxes at a flat rate of 24% on their income in Spain, exempting income generated in other countries.
Can Spaniards benefit from the Beckham Law?
Generally, Spanish citizens cannot benefit from the Beckham Law. However, there is one exception: if a Spaniard has resided outside Spain for at least the last 10 years, and returns to the country for work reasons with an employment contract, he or she could opt for this special tax regime.
This makes it an interesting opportunity for returning expatriates, as long as the temporary requirements of not having been a tax resident in that period are met.
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