Beckham Law - How Expats Can Save On Taxes in Spain?

November 8, 2024

If you are considering a move to Spain for work, the Beckham Law could be a game-changer for your finances.

This special tax regime could potentially save you a significant amount on your taxes, making your relocation even more financially rewarding!

Known as the “Beckham Law” (named after soccer player David Beckham, who was the first to benefit from it upon joining Real Madrid), this tax regime originated in 2005 to attract foreign top talent and investors by providing a favourable tax rate.

General tax rates in Spain vary from province to province, reaching as high as 54%.

The Beckham Law, officially known as the Spanish Special Expatriats’ Tax Regime, is a special tax regime applicable to certain non-residents taxed in Spain.

The essence of the special tax regime is that a non-resident pays less taxes than a resident would for the same amount of earned income.

The Beckham Law Regime allows a non-resident to be taxed at a 24% flat rate on all income earned in Spain.

As of January 1, 2023, the Beckham Law has been updated to include a wider range of expatriates, including digital nomads. This expansion ensures that more people can benefit from the tax advantages of this regime, making it a more inclusive option for those considering a move to Spain.

So, let’s explore the tax advantages of the regime and who is an eligible beneficiary.

Requirements to Apply for the Beckham Law

The Applicant must not have been a tax resident in Spain five years before their relocation for employment;

The Applicant must have relocated to Spain for work, either as:

a new employee of a Spanish company, or
as an intra-company transferee or
as a digital nomad

The work carried out in Spain must represent the majority of the Applicant’s professional activity;

The Applicant’s spouse and dependent children under 25 years of age and elderly dependent parents who have moved to Spain within one year of the Application.

What Tax Benefits Does the Beckham Law Offer?

For qualifying Applicants, the Beckham Law offers:

– A reduced flat 24% income tax rate on earnings up to €600,000, with income over this threshold taxed at 47%;

– Taxation of only Spanish-sourced income;

– Wealth Tax obligations are limited only to Spanish assets;

– The benefits extend to the beneficiary’s spouse and dependent children;

What Is The Duration of Tax Benefits Under Beckham Law?

The Beckham Law provides tax benefits for up to 6 years. However, it’s crucial to stay informed about any potential legislative changes that could affect this regime. This knowledge will help you plan your finances and tax obligations effectively, ensuring a smooth transition to life in Spain.

Beckham Law in Spain: How to Apply

The application must be submitted within the first 6 months of arrival in Spain or 6 months from the registration with the Social Security System.

Below you will find the step-by-step process you must follow in order to apply for this regime:

Download form 030. You can find it here.
Submit it to the Spanish Tax Agency online.
Once you receive the approval from the Spanish Tax Authorities, you will have to send another application form, form 149.
In addition to this form, you must include your passport (complete), NIE, employment contract, and social security number
Finally, in 10 days you will receive the final acceptance certificate so that they can start applying this tax rate deduction.

Who is Not Eligible to Apply?

Freelancers or self-employed individuals, with the exception of digital nomad visa holders;
Sports professionals, irrespective of their income or status;
Directors who have an ownership strakes exceeding 25% of Spanish companies;

Will I Pay Taxes in Both Spain and My Home Country?

Spain has **double taxation treaties** with many countries, ensuring you aren’t taxed in both places on the same income.

These agreements are particularly beneficial for digital nomads working remotely for foreign employers while living in Spain.

In a Nutshell - Spain Beckham Law - Save On Taxes

For guidance on maximizing the benefits of the Beckham Law, consult a professional.

At Fast Passport Boutique, our team has over 20 years of experience with European banking and Spain residency by investment programs, ready to help you navigate Spain’s tax benefits and enjoy a smooth transition to life as a digital nomad.