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The Beckham Law: Special Tax Regime in Spain for Talented Individuals from Abroad

The Beckham Law, officially known as the Special Tax Regime for Workers Displaced to
Spanish Territory, is a special tax regime in Spain designed to attract talented
individuals from abroad. Named after the famous footballer David Beckham, one of the
first to benefit from this law, it offers significant tax advantages to qualified professionals
moving to Spain.

What is the Beckham Law?

The Beckham Law allows individuals who become tax residents in Spain to be taxed
under the Non-Resident Income Tax (IRNR) regulations. This means they are only
subject to taxation in Spain for income generated within the country, rather than their
global income.

Who is Eligible for the Beckham Law?

The Beckham Law is aimed at a specific group of individuals, including:
● Employees: Those moving to Spain for work reasons with an employment
contract or relocation letter.
● Digital Nomads: Employees working remotely for companies based outside
Spain.
● Company Directors: Administrators of companies based in Spain, including sole
proprietors, if certain conditions are met.
● Entrepreneurs: Professionals engaged in economic activities classified as
entrepreneurial.
● Highly Qualified Professionals: Individuals providing services to start-ups or
engaged in training, research, development, and innovation activities.
● Family Members: The spouse and economically dependent children of the main
applicant, provided they meet specific requirements.

Benefits of the Beckham Law

The Beckham Law offers several notable tax benefits:
● Income Tax (IRPF): Taxation is limited to income earned within Spain.
● Wealth Tax: Only the net value of assets and rights located in Spain is subject to
taxation.
● Large Fortunes Tax: Applicable only if the net value of Spanish assets exceeds
3 million euros.
● Model 720 Exemption: No need to file the informative declaration of assets and
rights located abroad.
● Regime Extension: The tax benefits can be extended to the applicant’s spouse
and economically dependent children.

Requirements for Applying

To qualify for the Beckham Law, applicants must meet the following criteria:
● Fiscal Residency: Must not have been a tax resident in Spain during the
previous 5 years.
● Reason for Relocation: The move to Spain must be for work or entrepreneurial
reasons.
● Application Deadline: The application must be submitted within 6 months of
registering with Spanish Social Security or receiving a Social Security coverage
certificate.
● Permanent Establishment: Applicants must not have a permanent
establishment in Spain, except in specific cases provided by law.

Documentation Needed

Applicants must provide the following documentation:
● Model 030: Initial application form.
● Model 149: Final approval form.
● Additional Documents: Passport, NIE, employment contract, and Social
Security affiliation number.

Pros and Cons:

Pros:
● Significant Tax Savings: Lower tax rates on income earned in Spain.
● Attractive to Talent: Helps attract skilled professionals and entrepreneurs.
● Predictable Tax Environment: Provides a stable tax regime for six years.

Cons:
● Complex Application Process: Requires thorough documentation and
adherence to strict deadlines.
● Limited Eligibility: Not available to all professions or individuals.
● Temporary Benefits: The regime only lasts for six years.

Practical Example:
Consider a professional with an annual income of 600,000 euros. Under the general tax
regime, they might pay an average tax rate of 45%, totaling 270,000 euros. Under the
Beckham Law, the first 600,000 euros would be taxed at 24%, resulting in a tax
payment of 144,000 euros. This offers a substantial saving of 126,000 euros.

If you’re considering taking advantage of the Beckham Law or have any other Tax and financial related concerns, we invite you to reach out to our partner whom is one of the top financial entities here in Spain. To help our clients navigate the complications of Spanish Tax system while staying current with their fiscal obligations, we offer you a free consultation with Entre Tramite to learn more and explore their services. If you have further questions or concerns, feel free to contact us.