WHAT IS THE BECKHAM LAW?
The Special Regime for workers posted to Spanish territory is also known as the Beckham Law and is regulated by Article 93 of the Personal Income Tax Law.
It is a special tax regime that grants the option to benefit from preferential taxation to those who move their residence to Spain for work. It is a very advantageous tax regime because its main purpose is to offer advantages to attract qualified workers to Spain.
The scheme is known as the Beckham Law because the footballer David Beckham was one of the first people to benefit from it.
HOW TO APPLY FOR THE BECKHAM LAW?
- It is an optional regime.
- It is possible to apply for the regime by submitting an application to the Tax Agency (Agencia Tributaria), demonstrating that the requirements are met, and the administration will review the documentation submitted and issue a resolution.
- If approved, the regime will apply for 6 years, although it can also be cancelled earlier.
What benefits does the Beckham law provide?
- Taxation of salaries at a fixed rate of 24% up to €600,000 (47% thereafter).
- Taxation in Spain only for the income obtained in Spain (with the exception of salaries).
WHAT ARE THE REQUIREMENTS TO BE ABLE TO APPLY FOR THE BECKHAM LAW?
- Not having resided in Spain in the last 5 years.
- That there is a new job that provides justification for the person's move to Spain.
- There are different alternatives to fulfill this requirement, but it is absolutely necessary that there is a job in Spain.
- Income cannot be obtained from a permanent establishment located in Spanish territory. That is to say, the applicant cannot have a self-employed activity (cannot be self-employed).
- It is advisable to plan this in advance because it is essential to comply with the legal deadlines set out in the law, as regards to:
- moving to Spain
- starting work
- applying for the regime
Advantages of the Beckham law
- Flat rate of 24% as opposed to the possible 50% tax rate under the general regime.
- The general taxable base (which includes earned income, rents, etc.) is taxed at an almost flat rate of 24%, up to a maximum of 600,000 euros. Anything in excess of this amount is taxed at 47%.
- Only income obtained in Spain is taxed, with the only exception of earned income (otherwise all worldwide income would be taxed in Spain).
- In the case of Wealth Tax (Impuesto de patrimonio), only assets located in Spain are taxed.
- There is no obligation to file form 720 or the Declaration of Assets Abroad.
Disadvantages of the Beckham Law
- Double taxation: double taxation agreements cannot be applied.
- There is no right to apply deductions for expenses unlike under the normal regime.
- Dismissal indemnity is also not possible.
- There is no right to deduct the minimum deduction for descendants or relatives.
HOW OUR TAX ADVISOR CAN HELP YOU WITH THE BECKHAM LAW
Our tax advisor must discuss your situation with you in order to be able to evaluate your case and to be able to tell you if you are likely to experience more advantages than disadvantages.
Once this initial analysis is done, our tax advisors will investigate whether or not you fulfill all the requirements, and if so, we will help you with the application to the Tax Agency, so that it is submited correctly. If it is not submited correctly, it won't be possible to submit it again.
Contact us so that we can help you:
